
Class _^.I}S-^5!X8_ 
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COPYRIGHT DEPOSIT 



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H. E. YuAX Shih-K'ai. 
A leader among moderate reformers in China. 



AMERICA 

AND THE 

FAR EASTERN QUESTION 

AN EXAMINATION OF MODERN PHASES OF 
THE FAR EASTERN QUESTION, INCLUDING 
THE NEW ACTIVITIES AND POLICY OF 
JAPAN, THE SITUATION OF CHINA, AND 
THE RELATION OF THE UNITED STATES 
OF AMERICA TO THE PROBLEMS INVOLVED 

BY 

THOMAS F. MILLARD 

AUTHOR OF "THE NEW FAR EAST" 



MAPS AND ILLUSTRATIONS 




NEW YORK 

MOFFAT, YARD AND COMPANY 

1909 



0^' 

^ 



^ 



Copyright, 1909, by 
Moffat, Yard & Company 
. ' New York 



All rights reserved 
Published, March, 1909 



EiRARY of CONGRESS 
Two CODies Received 
APR 14 1809 
^ Copy n*.. I entry 
-ASS Cl, J^i^c. NO' 



^ 



INTRODUCTION 

• Since the publication in March, 1906, of THE NEW 
FAR EAST, I have again twice visited the regions in- 
cluded in the scope of the Far Eastern Question, and have 
further observed and studied conditions there. The pres- 
ent work takes up the situation where my previous book 
quitted it; brings it forward, extends its prospect, and 
criticizes some results which have become apparent. 

I have avoided extensive use of statistics, and when any 
views and conclusions are based upon them I have exer- 
cised my own judgment in accepting or rejecting figures 
presented by governments and individuals. In the East, 
in perhaps a greater degree than elsewhere, statistics often 
are prepared to sustain an hypothesis. This is espe- 
cially true, at the present time, of some statistics which 
relate to the economic and fiscal situation of Japan. 

I expect that some persons will profess to find in this, 
as many did of my previous work, an anti-Japanese 
preachment. This it is not, in the sense that a desire to 
injure Japan is among its objects. I wish the Japanese 
nation and people success in aspirations which do not tend 
to cause international dissension and strife by impairing in- 
terests of other nations. That the present policy of Japan 
has this tendency is a conclusion I have reached after 
closely observing its trend for several years, and from 
studying its practical effects in localities where it is di- 
rectly applied. Having formed this opinion, I express it 
without hesitation, and endeavor to present facts and con- 
ditions upon which it is founded. To those who may 



INTRODUCTION 

think that in considering the activities of modern Japan I 
dwell on unfavorable phases, and ignore favorable ones, 
I will say that it is with the more significant aspects of 
Japan's policy that this discussion attempts to deal, and 
that admirable traits of Japanese character are not often 
mentrbned does not mean that I am ignorant of them. 
These characteristics are in a large sense common to all 
peoples, and it is only by possessing them to a considerable 
degree that any people can make its activities widely 
felt; moreover, favorable aspects of Japan have been pre- 
sented by a thousand writers, and are kept before the 
world by an organized publicity with which no individual 
can compete. In juxtaposition with what I consider to 
be disturbing and probably unattainable ambitions of mil- 
itant Japanese statesmen, I have tried to show counter- 
balancing interests and forces which are involved. 

To the extent that I have approached the subject espe- 
cially from the point of view of the interest of the United 
States of America, and in this only, the discussion is par- 
tisan; and this will, I hope, be excused when it is remem- 
bered how little American interests are considered in the 
extensive literature of this question. While I hope that 
the book will have some effect upon the solution of prob- 
lems which are reviewed, by bringing to bear upon them 
enlightened public opinion and advanced statesmanship in 
America and elsewhere, I have not had effect only in mind 
when writing it. 

I thank the publishers of The New York Times, Scrib- 
ner's Magazine, and Appleton's Magazine for their per- 
mission to reproduce matter previously printed in those 
publications. 

Thomas F. Millard. 
New York, February i, 1909. 



CONTENTS 

Chap. Page 

I.— THE WAKING ORIENT i 

The Greatest International Question — Issues In- 
volved — Rapid Evolution of Conditions — Sentimen- 
tal Influences at Work in the East — Effects in India 
and China — The Lesson of Japan's Victory — Ef- 
fects Upon the Anglo- Japanese Alliance — New In- 
ternational Agreements — Realignment of Interests 
— Fra>nce's Attitude — Germany's Policy — New 
Balance Wheel Needed — Position of the United P 
States — Turning Point in American Diplomacy — ^A 
Importance of Relations With China — Oriental-^ 
Checks on Pan-Orientalism — A Disturbing Factor. 

II.— JAPAN'S NEW ECONOMIC REGIME . 15 

Japan's Advantages in Embarking Upon a New 
Policy — Features of the Policy — Paternal Concep- 
tion of Government. — Economic Situation of the 
Nation — Genesis of the New Idea — Need for Rev- 
enues — Government Control of Industry — Forms 
of Encouragement Applied- — Part Played by the 
Banks — Their Relation to the Government — Meth- 
ods Employed — Use of Subsidies — Command of 
Transportation Facilities — Suppression of Internal 
Opposition — The New Protective Tariff — Re- 
sources of the Country — Optimism of the People. 

III.— JAPAN'S FOREIGN TRADE POLICY . 27 

Broad Political Purpose Involved — Japan's Geo- 
graphical Position — Its Relation to this Question — 
vii 



vill CONTENTS 

Chap. Page 

Japan's Aspiration to Oriental Leadership — Prem- 
ises of Industrial Control — Political Domination 
Important — Economic Elements — Competition to 
be Met — Oriental Obstacles — Japanese Methods — 
Legitimate and Illegitimate Methods Considered — 
Their Application to Asia — International Bearing — 
A Hypothetical Example — Japan and China — The 
Lion in Japan's Way — Interest of the West in This 
Problem. 

IV.— JAPAN'S FOREIGN RELATIONS . . 39 

Present Demoralization — Possible Effects Upon 
Other Nations — Japan's Modern Foreign Policy 
Examined — Its Origin and Development — After 
Effects of the Peace Treaty with Russia — Fall of 
the Katsura Cabinet — Hayashi's Administration of 
Foreign Affairs — Basic Principle of His Policy — 
Its Chief Objective — Relations With China — Dip- 
lomatic Moves and Errors — Disintegration of Hay- 
ashi's Policy — Reasons for Its Failure — Decline of 
Japan's Prestige — Her Rupture With America — 
Effects of This Incident — The Attack Upon Hay- 
ashi. 

v.— AMERICA AND JAPAN 49 

Japan's Modern Attitude Toward America — At- 
tempted Isolation of America in the East — Diplo- 
matic Moves by Japan — The San Francisco School 
Incident — The Immigration Question — Weak Atti- 
tude of the Washington Government — Ignorance of 
Conditions — Change of Heart at Washington — 
Ambassador Wright's Difficulties — Turn in the Sit- 
uation — Transfer of the American Fleet — Some 
Results of This Move — Elimination of Trivial Mat- 
ters — Revelation of the Real Issue — Disadvantages 
of Obscurity in Diplomatic Matters — America's 



CONTENTS ix 

Chap. Page 

Superior Position — Alteration of Balance of Power 

— The Old Japanese-American Entente Finished. 

VI.— JAPAN'S MILITARY AND NAVAL 

PROGRAMME 62 

Efforts at Secrecy — Revelations of the Budget — 
Some Comparisons of Expenditure — Debate in the 
Diet — Foreign Attention Attracted — Discontent of 
the Conservative Element in Japan — Explanations 
and Arguments of the Government — General Te- 
rauchi's Utterances — Popular Propaganda for Mili- 
tary and Naval Expansion — Creation of War Fund 

— International Interest in the Matter — Object of 
the Military Policy — Directed Against China — Re- 
lation of the United States to the Question — Un- 
reliability of Diplomatic Pronouncements. 

VII.— JAPAN'S MILITARY AND NAVAL 

STRENGTH 73 

Japan's Immunity from Invasion — Not the Object 
of Hostile Ambitions — Her External Belligerency 
Estimated by Comparisons — Some Fallacies About 
Militant Japan — Her Army and Navy Scrutinized 

— Conditions of Military Service — Composition of 
the Army — Term of Service — Japanese Officers — 
Passing of War Conditions — Exaggerated State- 
ments — Equipment of the Army — Mistaken Con- 
ceptions — The Japanese Navy — Personnel and 
Equipment — Its Present Condition — Significance 
of Japan's Preparations. 

VIIL— POLITICAL TENDENCIES IN JAPAN 8 8 

Structure of the Government — Basis of Popular 
Participation — The Suffrage — The Parliament — 
House of Lords — House of Representatives — The 



X CONTENTS 

Chap. Page 

Elder Statesmen — Political Parties — Control by the 
Oligarchy — Political Corruption — Gradual Awak- 
ening of the Masses — Their Exploitation by the 
Oligarchy — The Burden of Taxation — Policy of 
the Saionji Ministry — The Commercial Class — 
New Political Forces — "Government Worship" — 
The Emperor — The Imperial Household in Trade 
and Finance — Growth of Socialism — Prospects for 
Reform — Influence of Western Sentiment. 

IX.— THE FISCAL SITUATION IN JAPAN . 102 

Some Results of Economic Innovations — Intrusion 
of the Government Into Business — Its Creation of 
Assets — Nationalization of the Railways — Stalking 
the Foreign Investor — Optimism in the Saddle — 
Increase in Capitalized Industries — Basis for This 
Expansion — Shyness of Foreign Capital — Reasons 
for This Disposition — Collapse of the " Boom " — 
Fiscal Condition of the Nation — Increase of Taxa- 
tion — Wages in Japan — Proportion of Per Capita 
Taxation to Earnings — Decline of the National 
Ownership Policy — Discontent of the People — Ex- 
ternal Pressure Upon Japan — A Crisis Approaching. 

X.— FOREIGNERS AND FOREIGN INVEST- 
MENTS IN JAPAN 113 

The Opening of Japan — Intrusion of Foreigners 
— Establishment of Their Status — Their Influence 
Upon the People and Nation — The Abolition of Ex- 
tra-territoriality — Alteration of Conditions — Per- 
sonal Rights of Foreigners — Treaties, Laws and 
Their Enforcement — Change In Sentiment Among 
Japanese — Reasons for This Change — Attitude of 
Japanese Courts Toward Foreign Residents — Exclu- 
sion of Some Classes — Property Rights of Foreigners 



CONTENTS xi 

Chap. Page 

— Basis for Foreign Investments — Defects in the 
* I/aws — Inducements to Foreign Investors — Placing 

Japanese Securities Abroad — Western Influence 
Upon the Development of Japan's Industry and 
Trade — Foreigners Still Needed. 

XL— THE SUBJUGATION OF KOREA . . 128 

Establishment of Japan's Suzerainty — Administra- 
tive Reorganization of Korea — Japanese " Advisers " 

— Creation of the Residency — Marquis Ito's Posi- 
tion — Struggle Between the Military and Civil Fac- 
tions — Deposition of the Emperor — Final Extinc- 
tion of Korean Autonomy — Disbanding the Korean 
Army — Japanese Attempts at Reform — Practi- 
cal Effects of Japanese Reforms — Situation of the 
Koreans — Their Distress Under Japanese Rule — 
Japanese Immigration — Attempts to Jap-ize Ko- 
rea — Exploitation of the Country — The Insur- 
rection — A Hopeless Struggle — Position of the 
Korean Court — The Emperor a Prisoner — Chris- 
tian Missionaries in Korea 7— A Deplorable Situation. 

XIL— THE OPEN DOOR IN KOREA . . .149 

A Pat Example — Unique Position of American 
Interests in Korea — The Policy of Japan — Elimina- 
tion of Pseudo-Political Interests — Assurances to the 
United States — Severance of Foreign Diplomatic Re- 
lations With Korea — Japan's War Upon Foreign 
Interests — The Fight on CoUbran & Bostick — 
Underhand Methods — Persecution of American 
Firm — The " Kapisan " Case — Discrimination 
Against Foreign Interests and Trade — Uses of the 
Railways — The " Open Door " a Farce — Remain- 
ing Obstacles to Complete Annexation — Korea a 
' Japanese Preserve. 



xil CONTENTS 

Chap. Page 

XIII.— THE BALKANS OF THE EAST . .163 

Manchuria a Danger Spot — Course of Recent 
Events There — The Termination of Hostilities — 
Various Political Entities Involved — Russia, Japan 
and China — Chaotic Conditions — Russia's Position 

— Her " Sphere " the Larger — Japan's Position 
More Significant — Reasons for This Analyzed — 
Japan and China — The Yuan-Komura Agreement 

— The Supplementary Articles — Antecedents of 
This Treaty — The Status of Japan — " Police " and 
" Railway Guards " — Occupation of the Country. 

XIV.— THE EVACUATION PERIOD . . .176 

Drift of Japan's Policy in Manchuria — Signifi- 
cance of Internal Dissensions in Japan — Military 
and Civil Factions — Considerations Involved — Dif- 
ferent Opinions, One Desire — The First " Open- 
ing " of Manchuria — General Oshima's Attitude — 
Marquis Saionji's Visit — Shift of Japanese Head- 
quarters — Real Situation at Moukden — The Vice- 
roy's Position — His Excellency Practically a Pris- 
oner — Visit of a Foreign Official to Moukden — 
Situation of Chinese Inhabitants — The Second 
" Opening " of Manchuria — Opposition in Japan 

— Temporary Retirement of Viscount Hayashi — 
Partial Restoration of China's Autonomy — Further 
Negotiations. 

XV.— PROPERTY RIGHTS IN MANCHURIA 188 

A Puzzling Question — Japanese Rights Inher- 
ited From Russia — The South Manchurian Rail- 
way — Mines and Other Concessions — Additional 
Requisitions by the Japanese — Validity of Titles in 
Dispute — Japanese Settlements — The Case of An- 
tung — Seizure of Land — Methods Employed — 



CONTENTS xIII 

Chap. Page 

Monopoly of Facilities — The Case of Newchwang 
— Civic Improvements — A Speculative Project — 
Confiscation of Rights — Use of Chinese Revenues — 
Acquisition of Chinese Private Property — Japan's 
Moral Shift — Bearing of These Propositions Upon 
China's Sovereignty — The Yalu Timber Industry — 
A Deadlock. 

XVL— THE OPEN DOOR IN MANCHURIA 202 

Commercial Aspects of the Military Regime — 
Russia Not an Aggressive Factor — Japan's Com- 
mercial Activity — Part Played by Japanese Immi- 
grants — Attitude of Japan — The Exploitation of 
Manchuria — Japan's Proprietary Tone — The 
" Open Door " — Elements Involved — Conditions 
Affecting Incoming Commerce — Japan's Control of 
Transportation Facilities — Use of Japanese Shipping 
Lines — Encouragements to Japanese Trade — Ja- 
pan's Assumption of Sovereignty — International In- 
terests Affected — Japan's Denial of Alleged Dis- 
criminations. 

XVIL— THE OPEN DOOR IN MANCHURIA 

— Continued 213 

Japanese Closure of the Country — Injury to For- 
eign Interests — Policy of the Military Administra- 1 ^ 
tion — Passports Refused to Foreigners — Such Re- 
strictions Unnecessary — Visit of Foreign Merchants 
— Their Report and Recommendations — Evasion of 
Chinese Customs — Pretense of Military Necessity — 
Protests of Chamb" of Commerce — Japanese Re- 
fusal to Pay Likm — Chinese Officials Ignored — 
Usurpation of Chinese Private Property — Character 
of Japanese Immigrants — A Foreign Missionary's 
Views — Japanese in Non-treaty Towns — The Prin- 
ciple Involved. 



xiv CONTENTS 

Chap. Page 

XVIIL— THE OPEN DOOR IN MANCHU- 
RIA — Continued . . . . . . 226 

Commercial Effects of Japanese Administration 
Upon the Chinese — Governmental Aid to Japanese 
Immigrants — Petty Japanese Traders — Their Real 
Function — Auxiliaries of the Great Japanese Firms 
— The Mitsui Bussan Kaisha — Effects of Japanese 
Evasion of the Likin — Chinese Collectors Ejected — 
Cornering the Bean Cake — Discrimination Against 
Foreign Firms - — Some Pertinent Examples — Expe- 
riences of an American Firm — Japanese Counterfeits 
and Imitations — Japanese Manipulation of the Cur- 
rency — The Yokohama Specie Bank — Japan's Use 
of Dalny. 

XIX.— THE OPEN DOOR IN MANCHURIA 

— Concluded 245 

Test of This Commercial Principal — All Practi- 
cal Conditions Here Defined — Accessibility of Man- 
churia — Causes for Trade Stagnation — Gradual 
Alteration of Japanese Methods — Diplomatic Pro- 
tests — Normal Conditions Outwardly Restored — 
Petty Evasions Continued — Attempt to Injure New- 
chwang — Japanese Railway Rate Discriminations — 
The Fakumen Railway Dispute — Basis of Japan's 
Objections — Alleged Secret Clause — The Chinese 
Version — Weakness of Japan's Position — Relation 
of the Fakumen Question to the " Open Door " Prin- 
ciple — Japan's Railways In Manchuria — Their In- 
ternational Status — Keeping the Chinese Railway 
Out of Moukden — Marketing Foreign Products in 
Manchuria — Situation of Japanese Traders. 

XX.— POLITICAL ISSUES IN MANCHURIA 259 

Present State of the Country — China's Efforts' to 
Recover Autonomy - — Policies of the Viceroys — 



CONTENTS XV 

Chap. Page 

Japanese Evacuation of Moukden — Troops With- 
drawn — Slight Alteration of Political Status — 
Japan's Grip Retained — Japanese Garrisons — Is- 
sues Between China and Japan — China's Authority 
a Fiction — The Question of Railway Administration 

— Claims of Russia and Japan — Basis for These 
Claims — The Chinese Eastern Railway Agreement 

— This Instrument Analyzed — Railway Settlements 

— The Issue at Harbin — Rail\^ ay Administrative 
Zones — Usurpation of Chinese Administrative Func- 
tions — Posts and Telegraphs — Lawlessness of Japa- 
nese Immigrants — The Antung-Moukden Railway 

— Chinese Sovereignty Overruled. 

XXL— RUSSIA IN EASTERN ASIA ... 274 

Russia's Repulse — Her Post-bellum Position — 
Revising Hei Eastern Policy — Russia's Position in 
Manchuria — Her Commercial Policy There — Con- 
trast With Japan — The Door Opened — Russia and 
Japan — Issues Between Them — Railway Adminis- 
tration — The General Convention of 1907 — This 
Document Analyzed — Railway Strategy in Man- 
churia — The Position of China — Baron Goto's 
Visit to Russia — Russia's Advantage — Conditions 
in the Russian Sphere — Harbin — Russia's Real At- 
titude. 

i/XXIL— THE REFORM MOVEMENT IN 

*^ CHINA 289 

Real Struggle for Reform Begun — Fight Be- 
tween Conservative and Progressive Elements — 
Bases for Practical Reform — The Chinese Govern- 
ment Analyzed — The Court — Not Opposed to 
Moderate Reform — The Empress Dowager — The 
Metropolitan Administration — Provincial and Local 
Administrations — Various Branches Interdependent 



xvl CONTENTS 

Chap. Page 

— The Reform Issues — Extra-territoriality — The 
Foreign Settlements — The " Right of Recovery " 
Doctrine — Popular Vitality of the Reform Move- 
ment. 

^XXIIL— THE REFORM MOVEMENT IN 

CHINA — Concluded .... 303 
'A Leaderless Movement — Reform Parties and 
Groups — The Ka-ming-tang — Reforms Advocated 

— Influence of the " Students " — The Conservative 
Reformers — Yuan-shih-k'ai — The Proposed Consti- 
tution — The Kao-lao-hui — Ideals of the Extreme 
Revolutionists — Seeking a Chinese Napoleon — Spo- 
radic Attempts at Armed Revolution — The Confu- 
cius Group — Course of Practical Reform — China's 
Fiscal Situation — Excellent Condition of the Em- 
pire — The National Debt — Fiscal Possibilities — 
The Specter of Foreign Interference — Dangers to 
China's Autonomy — Competent Officials Needed — 
Education of Chinese Abroad — Waning of Japanese 
Influence — Reform Movement Should be Taken Se- 
riously. 

^XXIV.— MODERN INDUSTRY IN CHINA . 322 

Beginnings in Modern Manufacturing — Elements 
Involved — Chinese Labor Conditions — Vast Sup- 
ply of Human Energy — Adaptability of Chinese to 
Modern Industrial Methods — Development of Mod- 
ern Industrial Capability — Wages and Output — 
Comparative Cost of Production — Oriental Standard 
of Living — Probabilities Estimated — Raw Mate- 
rials — Capital — Hidden Wealth of the Chinese 
People — Lack of Adequate Banking Facilities — 
The Chaotic Currency — Status of Modern Indus- 
trial Projects — Railways in China — Their Earn- 
ing Power — Future Development — Opportunity 



CONTENTS xvii 

Chap. Page 

for American Enterprise — Backwardness of Ameri- 
can Business Interests in China — Chinese Attitude 
Toward Modern Methods — Possibilities of the 
Chinese Market — Possible Effects of China's Indus- 
trial Development Upon America. 

XXV.— AMERICAN TRADE IN CHINA . . 337 

Development of China's Foreign Trade — Condi- 
tions Which Surround It — The Maritime Customs 

— Proposed Modifications — Elements Involved — 
Possible Effects — Comparative Position of Foreign 
Powers — Growth of American Trade — Second to 
Great Britain — Progress Without Encouragement or 
Stimulation — America's Commercial Rivals in China 

— Possible Developments — Land-borne Trade Reg- 
ulations — Factors in the Coming Struggle — Meth- 
ods of Competitors — Foreign Banks in China — In- 
creased Consumption of Foreign Products — China's 
Power of Commercial Retaliation — The Guilds. 

XXVI.— CHINA AND THE UNITED STATES 352 

A Storm Center — America's Relation to the Fu- 
ture of China — Some Aspects of This Question — 
Major and Minor Premises — The Pacific Ocean 
Powers — Their Comparative Rank Estimated — 
Factors Involved — Material Interests of the Nations 

— The Element of Territory — Riparian Rights — 
Commerce — The Position of America — The Dis- 
turbing Element — America's Efforts in China's Be- 
half — Attitude of the Powers — " What Will Amer- 
ica Do?" — Should the United States "Interfere"? 
— Various Kinds of Interference — Phases of " Agres- 
siveness " — China's Need for Advice and Aid — 
America Cannot be Indifferent — Need for an Ag- 
gressive Asiatic Policy. 



xviii CONTENTS 

Chap. Page 

XXVIL— CHINA AND THE UNITED 

STATES — Concluded . . . .363 
Diplomatic Weathervanes — The Root-Takahira 
Note — This " Agreement " Analyzed — Its Ante- 
cedents and Conditions Precedent — Its Relation to 
China — Disquieting Features — Japan's Apparent 
Objects — The American Viewpoint — Essence of 
This Incident — Efforts to Prevent a Chinese- Amer- 
ican Understanding — Genesis of These Efforts — 
International Jealousies Invoked — A Significant In- 
cident — Visit of the American Fleet to China — Op- 
posing Intrigues — Part Played by the American 
Minister to China — Diplomatic Ineptitude — The 
Fleet at Amoy — Effects of This Incident. 

XXVIIL— FOREIGN RESIDENTS IN CHINA 386 

The Foreign Settlements — Their Development 
and Growth — Modern Shanghai — Government of 
the Foreigners — Their Character — Double Stand- 
ards of Life — Gradual Reversion to Normal — Es- 
tablishment of Foreign Courts — Process of Social 
Evolution — Position of the United States — Regula- 
tion of Social Evils — Attraction of Undesirable 
Classes to American Jurisdiction — Creation of a 
United States Court for China — Attempts to De- 
stroy It — Their Failure — Uses of the Court — 
American Consular Needs — Foolish " Economy " — ■ 
Present Status of Foreigners — Their Anomalous Po- 
sition — The Foreign Missionaries. 

XXIX.— THE PHILIPPINES TO-DAY . . 404 

A Shuttlecock of Politics — The Situation in Evo- 
lution — The Military Regime — Civil Govern- 
ment — Heritages from the Insurrection — Essence 
of the American Policy — Predictions of Failure — 



CONTENTS xix 

Chap. Page 

Growth of Racial Antagonism — Attitude of Some 
Americans — The Problem Presented — Evolution of 
Filipino Participation in the Government — The 
Situation Now — Americans in the Government — 
The Bureaus — Their Relation to the Whole Work 

— Americans Losing Heart — Reasons for this Senti- 
ment — The Dilemma — Disintegration of the " In- 
dependence " Movement. 

XXX.— THE PHILIPPINE ASSEMBLY . .418 
A Significant Episode — Conditions Precedent — 
Extension of the Suffrage — Qualifications of Voters 

— The Special Election Law — Qualifications of 
Delegates — Filipino Political Traits — The Regis- 
tration — Popular Indifference — The Campaign — 
Parties — Pre-election Promises — The Katipunan 
Flag Incident — Indignation of Americans — Result 
of the Election — Character of Delegates. 

XXXL— THE PHILIPPINE ASSEMBLY — 

Concluded 436 

Convocation of the Assembly — American Senti- 
ment — Powers of the Assembly — Limitations Upon 
It — Election of a Speaker — Protested Seats — 
Elimination of Party Lines — External Influences — 
Powers of the Commission — The Provincial Elec- 
tions — Reaction From Radicalism — Work of the 
Assembly — Character of Measures Proposed — 
Popular Interest — Some Aspects of This Experi- 
ment — Possible Commercial Effects — Some Com- 
parisons — Hypothesis of the American Policy — A 
Good Beginning. 

XXXIL— VALUE OF THE PHILIPPINES . 451 

Anomalous Position of the Islands — Relation of 
the Political Problem to the Economic Situation — 



XX CONTENTS 

Chap. Page 

Mental Attitude of Americans Toward the Islands — 
Possibilities for Development — Source of Suppl}^ for 
America — Hawaii and Porto Rico — Some Compari- 
sons — America's Economic Attitude — Reasons for 
This — Obstructionists in America — Injustice to the 
Islands — The Refusal to Grant Free Trade — Op- 
position in the Philippines — Political and Economic 
— The Question of Revenue — Example of Porto 
Rico — Natural Resources — Capital Needed — The 
Islands not a " Burden." 

XXXIIL— VALUE OF THE PHILIPPINES 

— Continued 464 

State of Labor in the Islands — Fallacies Regard- 
ing Filipinos — Shallow Conclusions — Early Amer- ^ 
ican Experiences — Expectation and Fulfillment — 
False Standards — Erroneous Ideas — Filipino Pecul- 
iarities — Kind of Labor Needed — Experience of 
Large American Firms — Bending American Meth- 
ods to the Filipino — Results Versus Methods — The 
Philippine Railways — Experience in the Visayas — 
Organization and Method — Native Prejudices Re- 
spected — Economic Results of This Policy — Grad- 
ual Improvement — jVIechanical Aptitude of the Na- 
tives — Wages in the Islands — Filipinos Amenable 

to Environment. 

XXXIV.— VALUE OF THE PHILIPPINES 

— Concluded 476 

Adverse Conditions — Pernicious Agitation — 

Moral and Material Viewpoints — Cost of the Is- 
lands to the United States — Confusion of Issues — 
An Economic Paradox — Inadequacy of Proposed 
Measures — Present State of the Islands — Cost of 
Maintenance — Question of Their Security — The 



CONTENTS xxi 

Chap. Page 

Extra Expense — A Philippine Native Army — Ex- 
cellence of Material — Islands are Self-supporting — 
Their Fiscal Situation — Fallacy of Some Economic 
Objections — Proposed Sale of the Islands — Possible 
Economic Effects — Moral Considerations Involved 

— No Basis for " Get Rid of Them " Argument — 
The " Problem " Exaggerated. 

XXXV.— THE MORO PROVINCE . . .488 

The Other Philippines — History of the Moros — 
Early Settlements — Piratic Excursions — The Span- 
ish Regime — Transfer to the United States — The 
American Policy — Efforts at Reform — Power of the 
Datus — Troubles With the Moros — Suppression 
of the Insurrection — Establishment of Civil Govern- 
ment — Its Semi-military Character — The Adminis- 
trative Process — Population and Resources — Fiscal 
Situation — The Schools — Moro Characteristics — 
Mindanao — The Sulu Archipelago — The Islets — 
Jolo — Juramentadas — Moros and Filipinos — A 
Valuable Possession. 

XXXVI.— AMERICA'S POSITION IN THE 

PACIFIC 503 

Issues Involved — American Interests in the East 

— Question of Their Security — Command of the 
Sea — Naval Bases — Their Use and Requirements 

— The Question Practically Estimated — Prospec- 
tive Opponents — America and Japan — The Situa- 
tion Elucidated — Its Possibilities and Probabilities 

— Elements of the Problem — The Geographical Fac- 
tor — The Defense of Hawaii — A Possible Japanese 
Attack — The Factor of Transportation — Prelimi- 
nary Moves — Mobilization and Dispatch — Logical 
Conclusion of the Proposition. 



xxii CONTENTS 

Chap. Page 

XXXVII.— AMERICA'S POSITION IN THE 

FACIFIC — Concluded . . .520 
Position of the Philippines — Present Insecurity — 
American Troops in the Islands — Problem of Their 
Reinforcement — Possibility of a Prolonged War — 
Non-military Factors — Comparative Increase of 
- Naval Armaments — Naval Construction in the 
United States — Finance and Economics — European 
Sympathy — The Attitude of England — Japan's 
Disadvantages — The Second Period — A Breathing 
Spell — Preparedness an Assurance of Peace — 
Deadlock About an Eastern Naval Base — Reasons 
for This — A Question of Sites — Procrastination 
Dangerous — Economies of the Proposition — A New 
American Naval Policy — America's Responsibility. 



LIST OF ILLUSTRATIONS 



His Excellency Yuan Shih-K'ai Frontispiece . 

FACING PAGE 

Head Office of the Nippon Yusen Kaisha, Tokyo . i8 ^ 

Financial Center of Tokyo i8 

Head Office of the Yokohama Specie Bank at Yoko- 
hama 32 •^ 

Japanese Schoolboys being Instructed in Military 

Drill 68^ 

Japanese Schoolboys Practicing Breaking Through 

Entanglements 68 

A Street in Seoul 128 '^ 

Branch at Seoul of the D'ai Icho Ginko .... 138*^ 
Street in the Japanese Quarter of Seoul . ,. . .138 

Typical Landscape in Korea i48v 

Railway Station at Moukden 170 

The Railway Station, Liao-yang, Manchuria . . .170 
New Japanese Administration Building, Moukden . 184 
A Fete in the Japanese Settlement, Moukden . .184 
Street in Japanese Settlement at Antung . . . ig2« 
The Hospital, Japanese Settlement, Newchwang . 198 
Street in Japanese Settlement, Newchwang . . .198 

Scene in Chien-Tao 204/ 

Timber Rafts on the Yalu River '. . 204 

On the South Manchurian Railway 216-' 

Japan's Commercial Invasion of Manchuria . . .216 
New Chinese Administration Building, Moukden . 246 - 
New Chinese School Building, Moukden .... 246 

Camel Cart, Mongolia 268 v 

Chinese Out-post in Mongolia ....... 268 

xxili 



xxiv LIST OF ILLUSTRATIONS 

FACING PAGE 

(a) Russian Out-post in Mongolia 282 

(b) Russian Out-post in Mongolia 282 

A Wealthy Chinese in his Motor Car 296^ 

Modern Chinese Army Officers 304 J 

The New Chinese Army. Troops Maneuvering . . 304 

Nanking Road, Shanghai 316 

Government Iron and Steel Works, Hanyan, China 328 

Chinese Government Arsenal at Wu-Chang . . . 336 v 

Street'SE^j- Tsingtau 346v 

Chinese Mechanics at Work 35o>^ 

Chinese Engineer at Work 362-^ 

American Legation Building, Peking 374- 

The Bund, Foreign Settlements, Hankow, China . 386''' 

View of Shanghai International Settlement . . . 394,, 

Scene on Whang-poo River, Shanghai 394 

Lawn of the Shanghai Race Club on a Cup Day . 402,. 

Club-house of the Race Club, Shanghai .... 402 

Scene on the Pasig River, Manila 416-^ 

The First Philippine Assembly in Session .... 436^ 

New Provincial Model School, Philippines . . . 454 

Typical Municipal Building in the Provinces . . . 454 

Building Railways in Cabu 470^ 

Philippine Constabulary 482 '' 

Transportation in the Philippines 486 

Fleet of Moro Vintas 500 

A Street in Zamboanga 520 

Moro Children 520 

MAPS 

1. Map Illustrating Railway Stratj:gy in China . .232 

2. General Map end of Book 



THE FAR EASTERN QUESTION 

CHAPTER I 

THE WAKING ORIENT 

The Greatest International Question — Issues In- 
volved — Rapid Evolution of Conditions — Sentimental 
Influences at Work in the East — Effects in India and 
China — The Lesson of Japan's Victory — Effects Upon 
THE Anglo- Japanese Alliance — New International 
Agreements — Realignment of Interests — France's At- 
titude — Germany's Policy — New Balance Wheel 
Needed — Position of the United States — Turning 
Point in American Diplomacy — Importance of Relations 
With China — Oriental Checks on Pan-Orientalism — - 
A Disturbing Factor. 

It is conceded by many students of greater affairs that 
the Far Eastern Question presents the most important 
international issue with which the world now has to deal. 
No other question covers so broad a field, includes forces 
so complex and diverse, has such inherent power. Its solu- 
tion cannot fail materially to affect the future of all nations, 
and to influence the destiny of the entire human race. 

If these premises are granted, it seems difficult to exag- 
gerate the importance of events which mark progress of the 
situation in the East, which give it direction, and which 
determine the course of policies in evolution. That the 
international situation there is being radically re-shaped, 
as a result of the Russo-Japanese war, is evident. Condi- 

I 



1 THE FAR EASTERN QUESTION 

tlons are changing with almost bewildering rapidity, alter- 
ing the relations of governments, undermining treaties 
and comities upon which such relations have been founded. 
New international agreements follow each other in rapid 
succession ; others are proposed. Former friendly nations 
now regard each other askance; presently allied ones are 
reconsidering the bases of their alliances. Everywhere is 
uncertainty, and in some quarters apprehension. New 
ideas, new ideals, new purposes and new methods fill the 
Oriental mind, are being translated into action, and pres- 
ently will be felt in the West. It is no longer possible to 
doubt that the East is waking. 

Manifestations of this waking Orient are expressed in 
many phases, which may be broadly classified as senti- 
mental and material. Most sentimental impulses now mov- 
ing in the East can be traced to the victory of Japan over 
Russia. There is no Asiatic country, from China to Persia, 
which has not felt the reaction of the Russo-Japanese war, 
and in which it has failed to awake new ambitions. These 
usually find expression in a desire to assert independence, 
to claim equality with white races, and have had the gen- 
eral result of causing western prestige to decline in the 
East. It is evident that this sentimental idea may affect 
even the internal affairs of all greater nations, which 
almost without exception have a " race problem " of some 
kind to deal with. This is of special interest to those 
western nations which have undertaken to govern millions 
of Orientals, among which Great Britain is prominent. It 
is probable that Great Britain has felt certain adverse ef- 
fects of Japan's success more keenly than has any other na- 
tion except China, which is interesting in view of the fact 
that England so considerably contributed to the rise of 
Japan and the comparative enhancement of her position 
among nations. 



THE WAKING ORIENT 3 

That unrest of the native population of India, which 
repeatedly has been indicated during the last three years, is 
taking a serious trend is admitted by many observers of 
events in the East; but to some its causes are obscure. 
While certain demonstrations confined to India have 
clearly developed and stand out strongly, they seem to 
bear slight harmonious relations to each other, and even 
to involve contradictions inconsistent with a definite pur- 
pose and common sentiment. This somewhat puzzling 
condition leads one to look further, outside of India, 
for light on the situation. In 1906 I traveled over a 
considerable part of the Orient, moving from East to 
West. At Yokohama I picked up a thread, which was 
subsequently found to be distinctly traceable through 
Korea, China, the Straits Settlements, Burma, and on to 
India. This is beginning to be spoken of as Pan-Orien- 
talism, frequently with skepticism, sometimes with rid- 
icule, and occasionally with alarm. However it now may 
be regarded in the West, its influence is felt in all eastern 
countries, and some of its manifestations in India have 
peculiar interest and significance. 

Like the reform movement in China, where a strong 
tendency toward modern progress is blended with occa- 
sional recrudescence of anti-foreign sentiment, the present 
ferment in India springs out of complex, even diverse, 
forces. Its basic sentiment undoubtedly is the growing 
desire of eastern peoples to take a larger part in the de- 
velopment and administration of their own countries. In 
India this half-formulated sentiment expresses itself in 
two phases ^— conditions which turn upon political and 
racial elements, and those which grow out of commercial 
and industrial matters. 

In many respects British administration in India is en- 
lightened and beneficial. It probably would be difficult 



4 THE FAR EASTERN QUESTION 

to convince many Britishers in or out of India that the 
chief aim and effect of British rule have not been and 
are not now for the advantage of the natives; and it is 
not easy to refute this long-established presumption, even 
if one were disposed to undertake the task, which I am not. 
In its more obvious manifestations the government is ex- 
cellent, its general administration quite efficient and 
free from petty official corruption. All this is common 
knowledge. Since she abandoned the attitude of con- 
queror for that of pacificator, England's treatment of 
natives of all classes has been generally beneficent and 
humane. Among other great reforms she has placed 
modern education within reach of the people, and uses 
competent natives in all grades of official life except 
the very highest. Broadly, it may be said that the 
Government's disposition toward the natives is to grant 
them all the opportunity and liberty which they are con- 
sidered to be capable of utilizing. This policy has pre- 
served peace in India and gradually is bringing material 
prosperity. 

But the native of India knows that while he may as- 
sist to govern, he really is ruled from afar and with- 
out his consent, a rule resting to-day, as in the days of 
Clive, upon British bayonets. This may sound harsh, 
but is the plain truth; and argument of the proposition in- 
volved, the right or wrong, the pro and con of it, is not 
pertinent in this connection. 

While present ferment in India is In a sense a manifesta- 
tion of perennial unrest, the cause of many explosions In 
the past, it has its particular sentimental genesis, and this 
is the success of Japan over Russia. It is first cousin 
of " The Orient for Orientals," " China for the Chinese," 
and similar catch-phrase doctrines. Dense as the mass 
in India is, the victory of Japan has penetrated its inner 



THE WAKING ORIENT 5 

consciousness. In fact, pains were taken to see that 
it did. Within the last three years the whole East has 
been penetrated by cheap motion picture shows, usually 
managed by itinerant Japanese. I have attended these 
exhibitions in various parts of China, at Hongkong, at 
Singapore, at Rangoon, and in India. Most of the pic- 
tures shown are ordinary in character, of the kind sent 
broadcast by European and American makers, but many 
display representations of the Russo-Japanese war. Some 
are authentic, no doubt, for I have seen them ex- 
hibited in the West, and represent Japanese troops in 
the field, etc., and Russian prisoners at Port Arthur 
and elsewhere. But some evidently are fakes of a trans- 
parent character, and these usually represent some imag- 
inary conflict between Japanese and Russians, in which 
Japanese invariably are the victors. Some of these pic- 
tures, taking the idea, perhaps, from similar ones (in con- 
ception) shown in London during the war in South 
Africa, depict Russians performing acts of brutality 
upon Chinese and other Orientals, who are rescued by 
Japanese and the Russians punished and humiliated. A 
Chinese or Indian coolie cannot be reached by literature, 
as a rule, except indirectly; but he is open to impressions 
from pictures which simulate action, the authenticity of 
which he does not dream of questioning, and which show 
the white race he has so long respected and feared beaten 
at war by a dark-skinned brother. By this and other less 
subtle means has the message which Japan's victory carries 
to the East been communicated to the masses in China and 
India. 

The relations between Great Britain and Japan pre- 
vents British officials and members of Parliament from 
openly criticizing the alliance in the light of some results 
which may be attributed to it, but it has not prevented 



6 THE FAR EASTERN QUESTION 

British subjects, particularly those who reside in the East, 
where manifestations of Pan-Orientalism are more obvi- 
ous, from freely expressing their opinions. The follow- 
ing, published in 1908 in The Japan Chronicle, an influen- 
tial English newspaper printed in Japan, fairly represents, 
I think, intelligent British opinion in the East of the 
Anglo-Japanese alliance : 

" It cannot be denied that there is a spirit of ambition 
and jingoism abroad in Japan to-day which will hardly 
be quieted except by a great success or a great disappoint- 
ment. The more such a feeling prevails among certain 
classes, the more it is disowned in responsible official quar- 
ters, and if any outbreaks of it occur in the utterances of 
prominent statesmen, the more carefully are they glossed 
over and explained away. 

" The old bogey of a Russian Invasion of India, which 
had such Influence on the minds of English statesmen 
during the eighties, has not been much in evidence of 
later years. But It seems that It still spooked In the 
minds of those who drew up the recent Treaty with 
Japan. The later course of events, the defeat of Russia 
and the new nationalistic agitation In India, have com- 
pletely overshadowed It, — so much so that It now seems 
doubtful to most people whether It ever really was any- 
thing more than a bogey, skilfully dressed up by Russian 
diplomats, and successful, even beyond the hopes of Its 
inventors, In distracting the attention of the rulers of 
India from more real Issues. It seems strange now to 
think that a possible attack on the north-west frontier of 
India, made through hundreds of miles of mountainous 
wilderness, could ever have seemed a more real peril to 
British tenure of the peninsula than the natural aspirations 
for independence on the part of three hundred millions 



THE WAKING ORIENT 7 

of Indians themselves. Much was heard, indeed, about 
Russian agents tampering with the loyalty of the masses; 
but it seems always to have been assumed that Indian dis- 
content would take the form of a preference for Russia, 
and that the people would be satisfied with a mere change 
of masters. 

" It seems clear that the first Treaty with Japan was 
inspired, on England's side, partly by the remains of the 
irrational fear of Russia, and partly by ignorance of the 
real strength of Japan. This country appeared in the 
eyes of the Western World in the light of a small nation 
standing up, for the sake of its independence, to almost 
certain defeat at the hands of the mighty Northern 
Power. The military strength of Japan was at that time 
little suspected abroad; her real spirit toward foreigners 
and the unlimited aspirations which her success would 
awaken were suspected still less. Taken altogether, the 
intentions with which the Anglo- Japanese alliance was en- 
tered into, in the light of the new issues which have de- 
veloped since," form as good an example as could easily be 
found of the insufficient amount of wisdom with which 
the world is governed." 

Sentimental effects which may be traced to the Anglo- 
Japanese alliance are interesting and far-reaching, but It 
is probable that some material results of Japan's rise have 
given British interests In the East greater concern. There 
Is no longer any serious attempt to conceal the fact that 
many of Japan's new activities are Injurious to interests 
of her ally, especially In commercial matters. Indications 
that British and Japanese statesmen are coming to under- 
stand that the aUIance contains fundamental weaknesses, 
and does not afford adequate assurance of matters which it 
was designed to safeguard, are plentiful. How else can the 



8 THE FAR EASTERN QUESTION 

recent Anglo-Russian,^ Russo-Japanese ^ and Franco- Jap- 
anese ^ agreements logically be accounted for? If the 
Anglo-Japanese ■* alliance is considered by Japan to guar- 
antee her position in eastern Asia, as it assumes to do, why 
should she feel it necessary to reach agreements concerning 
the same matter with other powers ? On the other hand, 
if England feels that the alliance with Japan assures 
the security of her Indian frontier, why did she hasten 
to reach an understanding with Russia which obviously is 
designed to cover the same ground? One hardly can 
doubt that British statesmen now are in a way to be con- 
vinced that the alliance with Japan is destitute of practi- 
cal advantage to England in sustaining her position in 
Asia, while its sentimental effects have tended to lower 
England's prestige. English statesmen must by now 
realize also that this alliance may embarrass her rela- 
tions with the United States, and with her colonies in 
America and the antipodes. It is especially offensive to 
Australasia, where Japan's ambitions are the subject of 
uneasy conjectures. Indeed, it Is probable that consider- 
able effort on the part of England and Japan will be re- 
quired to prevent their alliance from becoming, before 
it expires, a butt of international ridicule. A disposi- 
tion to openly criticize it already is displayed in the par- 
liaments of both nations. 

In Indo-China France also has felt the sentimental ef- 
fects of the Russo-Japanese war. Not for many years 
have her eastern colonies been so uneasy. That France 
is averse to further extension of Japanese influence in 
Asia may be assumed, but evidently she feels that it is 
prudent to safeguard her territorial interests there by 
falling in with the current. This probably induced her to 

1 Appendix H. 2 Appendix B. s Appendix G. * Appendix F. 



THE WAKING ORIENT 9 

make the " arrangement " ^ with Japan which was signed 
on June 10, 1907. This "arrangement" is so vaguely 
worded that it is devoid of significance except when con- 
strued in conjunction with the similar arrangement^ of 
Japan with Russia. It is interesting that this arrange- 
ment apphes to " the regions of the Chinese Empire ad- 
jacent to the territories where they [the signatory powers] 
have the rights of sovereignty, protection or occupation." 
This agreement intimates that France observes the drift 
of events in China, and is not disposed to fall outside 
the breastworks if the " open door " principle lapses into 
inanition, and the " sphere of influence " doctrine is defi- 
nitely revived. I do not interpret France's action in this 
matter to mean that she really favors the dismember- 
ment of China, as has been asserted, and which is be- 
lieved by some Chinese statesmen, but rather that she 
is preparing for possible eventualities. 

Germany's policy in the East has attracted little at- 
tention within the last three years, chiefly because it has 
pursued an even and consistent course, and has avoided 
embarrassing entanglements. It now appears that the 
reversal of Germany's attitude toward China, which was 
one result of recognition of certain effects of the Russo- 
Japanese war, was sincere and that she is willing to lend 
her influence to maintain the integrity of China and the 
" open door." Since her change of policy in China, Ger- 
many's position there has improved. Tsingtau rapidly is 
becoming the principal port of Shantung, and German 
commercial Interests In the Empire are moving with 
greater momentum since the passive hostility of Chi- 
nese, which was due to fear of German political designs, 
is being tempered. One is almost persuaded that Ger- 
5 Appendix G. ^ Appendix B. 



10 THE FAR EASTERN QUESTION 

man statesmen are convinced that their former policy 
was disadvantageous, and that they now beheve that Ger- 
man Interests in China will do better under the " open 
door " than under a division of the Empire according to 
" spheres " now outhned. There is little for China and 
other nations to complain about in Germany's recent actions 
in the East, which leads one to hope that her influence will 
be exerted in behalf of principles to which all the in- 
terested powers have subscribed. Japan, at the time when 
she was negotiating her latest agreements with Russia and 
France, tentatively approached Germany with a similar 
proposal, but without success. 

When the eastern situation is considered in the light of 
recent events and present circumstances, one is Impelled to 
conclude that international equilibrium there can only be 
restored and maintained by creating a new balance of 
power; one which will be established on a different base, 
and which will contain a new element of strength and 
stability. This can be supplied. In my opinion, only by 
direct and active participation of the United States of 
America. 

It seems Inevitable that any patriotic American whose 
attention is Intelligently directed to the subject will begin 
to consider the position of the United States in respect to 
the solution of this problem. It is evident that our nation 
will be materially affected by the course of events In the 
East, whatever It may be. Our position bordering upon 
the Pacific Ocean makes our national domain actually con- 
tiguous, In a modern sense, to countries which touch 
the Pacific on its western shores. We have possessions 
lying within the locality which must be the scene of the 
forthcoming evolution, and where some of Its results will 
be directly expressed. And we have a hopeful Interest, 
through commerce, in the enormous, the almost incalcul- 



THE WAKING ORIENT ii 

able material development which application of mod- 
ern western methods and influence to the teeming re- 
sources of China is sure to bring about. It is difficult, in 
any candid examination of the present situation in the 
East, and the probabilities which lie before that locality, 
^o escape a conclusion that the interest of the United 
States in them is fundamental, in so far as this expression 
may be applied to regions where our nation does not now 
exercise nor expect to acquire political authority. 

That our nation has reached another turning point in 
its development is generally recognized. The Spanish- 
American war and the unexpected acquisition of ter- 
ritories which was among its results brought new responsi- 
bilities and problems. But while these causes gave, for 
the moment, fresh interests and outlets, the greater and 
determining Impulse toward wider fields must be sought 
deeper among the wellsprings of our national energy. It 
lies, in my opinion, in our economic situation. The 
United States has reached a crisis of its industrial develop- 
ment. I do not mean that It no longer has room to 
grow within. The resources of our own country are only 
partially developed, and for many years to come the 
greater part of our national energy will continue to be 
expended upon them. But In the equation between our 
swelling Industrial output and our home consumption, 
enormous as this latter factor now is, we have come to a 
point when we must seek an outlet In new markets or 
soon see industrial conditions in America arrive at a 
state of arrested progress. Since such a condition will 
react upon our prosperity at home, and affect the future of 
our nation In comparison with other great nations of 
the world, it Is clearly the province of American states- 
manship to look beyond the needs of the moment and 
find new markets for American products, and to devise 



112 THE FAR EASTERN QUESTION 

ways and means to secure for them equitable entrance to 
those markets. 

This is one of the problems which confronts the new 
statesmanship which America must and mill have ; and in 
scanning the world for the commercial opportunity neces- 
sary for its fruitation, the eyes of our statesmen cannot 
fail to turn to the East. There are no longer any 
geographical mysteries in the world, in the sense of un- 
discovered lands suitable for the profitable application of 
human activity. The sphere which we inhabit is defined 
so far as terrestrial limitations are concerned; and if its 
economic possibilities are not yet fathomed it is because 
nature always holds some secret in reserve to be revealed 
only on imperative need and demand of mankind. In 
China are more than four hundred millions of intelHgent 
and industrious people, living in the temperate zone, and 
inhabiting a land which is a natural empire. There, too, 
is a great nation arrived at a turning point. There is 
something more than accident in this coincidence. Can 
anyone conceive that the American people will fail to 
rise to possibilities which are involved in the relations 
between China, and the United States? It is not al- 
ways possible for a Government by its separate action to 
create trade where none has before existed, although his- 
tory affords some examples of such accomplishment; but 
it can pave the way for trade. I believe that it is the 
duty of a Government to do this. The time has come in 
our national history when the vision of American states^ 
men should no longer be bound by the limits of our 
national territories, but should survey the whole world. 
It is not possible that such a survey can fail to include 
the Orient, where two-thirds of the inhabitants of the 
earth, just waking to new conditions and opportunities, are 
congregated. Between the United States and China is 



THE WAKING ORIENT 13 

a genuine community of interests, which has no propor- 
tionate parallel with the relations of our nation and any 
other Oriental state. If this is true, it is evident that 
no international arrangement or understanding having 
in mind the fate of China and the course of events there 
which does not to some extent accord with the interests 
and desires of the United States will possess any real 
vitality, nor give any genuine assurance that peace will 
be maintained in the East. 

There are Oriental checks to an extension of Pan-Orien- 
talism which, by bringing eastern peoples under a com- 
mon nationality or establishing among them an affiliation 
of political interests, might create a real yellow peril for 
the West. These take the familiar shape of international 
jealousies and hatreds. Chinese are as averse to being 
ruled by Japanese as by westerners; indeed, it may be 
that brought to a choice between these alternatives China 
would choose a western master. China is intensely hos- 
tile to Japan's present continental policy, which she be- 
lieves is directed against her. Left to pursue a normal 
development. Oriental nations which are now independent 
will in time create a stable balance of power among them- 
selves, as has been done in Europe. Japan's continental 
ambitions are meeting with opposition even in Japan. 
Some Japanese statesmen draw a parallel to England's 
former continental policy in Europe, which kept the nation 
continually involved until it was abandoned, and expect a 
like fate for Japan's new ambitions. Those who hold 
this opinion are, however, now too few to influence Japan's 
policy, and fear that its aggressive features can be checked 
only by a reverse. The destiny of the Orient, in compari- 
son with the West, ultimately will be measured by the 
position of China. 

Meanwhile, It is evident that Japan now is the most 



14 THE FAR EASTERN QUESTION 

virile disturbing factor in the Far Eastern Question, which 
entitles her modern activities and present situation, in all 
their important bearings, to priority in any comprehen- 
sive examination of eastern affairs. 



CHAPTER II 
JAPAN'S NEW ECONOMIC REGIME 

Japan's Advantages in Embarking Upon a New Policy 
— Features of the Policy — Paternal Conception of 
Government — Economic Situation of the Nation — Gen- 
esis OF the New Idea — Need for Revenues — Govern- 
ment Control of Industry — Forms of Encouragement 
Applied — Part Played by the Banks — Their Relation 
TO THE Government — Methods Employed — Use of Sub- 
sidies — Command of Transportation Facilities — Sup- 
pression OF Internal Opposition — The New Protective 
Tariff — Resources of the Country — Optimism of the 
People. 

In embarking upon a new national policy Japan was 
not hampered by some matters which under similar circum- 
stances would impede and restrain many other nations. 
Her position is something like that of the United States 
of America when the colonies formed a federal govern- 
ment. As the Americans then were able to begin a new 
political career without having first tc break the full 
force of old ideas and Institutions, so could Japan, after 
her victory over Russia, adopt an aggressive imperial pol- 
icy with slight Internal opposition. The force of old 
traditions and customs already had been broken. Japan 
had accepted the modern Idea, and her people are 
more easily swung, at this period, to support what Is pre- 
sented to them as an advanced policy or system than the 
people of any western nation would be. The success of 
the war established the militant oligarchy In complete con- 

15 



i6 THE FAR EASTERN QUESTION 

trol, and for the moment the national spirit was pecul- 
iarly susceptible to any proposal to which was tacked the 
national banner. And the flag adroitly was hoisted over 
the new paternal policy, which in its initial processes 
moved with all the energy a common national impulse 
could give. 

Some methods of Japan's new economic regime exhibit 
commercial and industrial paternalism in an extreme form. 
Here we find, for the first time in modern civilization, a 
great government extensively operating as a business cor- 
poration, and including under its direct control and super- 
vision all activities which enter into the proposition. Here 
are exemplified in some degree the forms, or a substantial 
semblance of them, which may result from a socialistic 
movement should it eventually be successful in the West. 

In entering upon this venturesome policy Japanese 
statesmen apparently were influenced by complex and partly 
antagonistic motives. Japan's economic disadvantages 
are such, in comparison with present and prospective com- 
petitors, that her statesmen feel the necessity of throwing 
united national energy into the new industrial and com- 
mercial movement. They reason that if left to follow 
their several bents the national activities will be too much 
diversified, and energy and time be lost through effort 
directed along unprofitable lines. In this idea lies the 
theoretical genesis of the new policy; but its practical in- 
centive and origin are found elsewhere; and lest west- 
ern advocates of government paternalism should too 
quickly point to Japan as a shining example (as some are 
inclined to do), it may be well to consider the circum- 
stances which influenced her in assuming such an ex- 
treme position. For although there are sincere believ- 
ers, among Japanese statesmen, in the soundness of the 
new system, it has from its inception been opposed by 



JAPAN'S NEW ECONOMIC REGIME 17 

many thoughtful men in public life, and could not so 
quickly have been entered upon by the Government under 
normal conditions. 

Termination of the war with Russia left Japan with 
many grave problems to be solved, and of these the more 
urgent was the state of the nation's finances. The Gov- 
ernment required money, and imperative necessity for rev- 
enue was a primary, perhaps the chief reason for its taking 
control of certain industries and utilities. This urgency 
became acute soon after the outbreak of war, when it 
was necessary to create new revenues and Increase old 
ones, and when collateral to secure interest on foreign 
loans must be found. Under these circumstances the Gov- 
ernment took over the tobacco, salt, camphor, opium and 
some other minor Industries. When the war ended the 
funds of the nation were nearly exhausted, and a 
large national debt and Interest charge had accumulated. 
More revenue was needed; so the Government cast about 
for any Industries and utilities which might be operated 
at a profit. These matters are now mentioned not to 
call attention to Japan's financial situation, but to point 
out that the nationalization of industry policy was not a 
result of consideration of the whole proposition on Its 
merits, as some casual western comment seems to assume, 
but was largely due to immediate and Imperative need 
for revenue. 

Control by Government of certain Industries and utilities 
with a view to their better regulation and to provide rev- 
enue is In Itself no novelty. The general plan is as old 
as civilization, and has In the past been attended by vary- 
ing success and failure. In so far as It has devised a 
system to develop and advance national Interests, the 
Government purposes to directly lend Its assistance to 
forms of Industry that promise a profitable future. Not 



1 8 THE FAR EASTERN QUESTION 

everything is to be specially promoted, although proposed 
activities in this line cover a wide field, from encourage- 
ment of culture of raw products needed in manufac- 
turing to assistance in getting products to a market. 
The Government takes upon itself to determine which en- 
terprises to promote. It is easy to see that here is in- 
volved a proposition that might strain the wisdom of a 
Solomon, but Japanese statesmen undertook it with an as- 
surance that did credit to their nerve, even if there might 
be misgivings about the soundness of their judgment. 

Such a system pivots upon the three usual bearings — fi- 
nancial, industrial and commercial. The financial side 
operates through the banks, which in Japan often are di- 
rectly associated with the Government. Great financial in- 
stitutions like the Nippon Ginko (Bank of Japan), the 
Yokohama Specie Bank and the D'ai Icho Ginko (The 
First Bank) really are as much a part of the Government, 
in regard to transactions which may affect the national in- 
terest, as the departments of War and Foreign Affairs. 
Through them are negotiated foreign and domestic loans 
of any magnitude, and they always are ready, at the sug- 
gestion of the Government, to come to the support of 
private or national enterprises which may need assist- 
ance. It would, I think, be interesting to elucidate some 
methods of Japanese banks in these transactions, par- 
ticularly in regard to placing Japanese national and in- 
dustrial bonds abroad; but a single example may serve 
for illustration. In the effort of the Government to ex- 
ploit Korea and Manchuria and establish Japanese com- 
merce so firmly in those localities that it cannot be dis- 
turbed by competition, an arrangement was effected by 
which the banks make loans to Japanese mercantile firms 
exporting to the continent at a reduced rate of interest, 
with rebates to those which are able to do an annual busi- 




Head Office of the Nippon Yusen Kaisha, Tokyo. 




Financial Center of Tokyo. 
Here are the Nippon Guiko (Bank of Japan) and other important 

Banks. 



JAPAN'S NEW ECONOMIC REGIME 19 

ness of a stated magnitude. Banks cannot do legitimate 
business after this method, and it is worth while to in- 
quire how those in Japan are able to manage. When 
the war ended the Government fortunately had in its pos- 
session the proceeds of the last foreign loan, which, taking 
advantage of Admiral Togo's naval victory, it had favor- 
ably placed in England, Germany and America. Part of 
this money was deposited with several of the larger banks, 
to be disposed as the Government directed. Some of it 
was used to finance the new economic system and was 
loaned, in some instances, at a lower rate of interest 
than it costs the Government. The difference must be 
supplied out of the national resources somehow, but this 
is a detail to which the Japanese people were in the be- 
ginning apparently blind. 

Some internal results of this policy, whatever they may 
be, will affect in no material degree, except as object 
lessons, or the interests of foreign holders of Japanese 
securities, the welfare of western nations. But one 
phase of nationalization of industry and commerce car- 
ries broad international possibilities. Competition in 
trade is a general condition, and often is stimulating; and 
hitherto it chiefly has been confined to individual or corpo- 
rate entities. We now see it added to the direct national 
activities of a cohesive and energetic nation. The pos- 
sibilities are many. It may be, should Japan's daring in- 
novation be successful, that commercial and industrial ri- 
valries of the future will become, to an extent not thought 
of today. International affairs. Not only does the logic 
of this proposition presage such a development, but Japan 
deliberately announced an intention to drive other indus- 
try and commerce out of certain fields, and Is marshalling 
the national energy and resources to support the move- 
ment. This conflict probably will at present be limited to 



20 THE FAR EASTERN QUESTION 

the Far East, in its direct manifestations, but it is con- 
ceivable that in time it may become a world policy, since 
promise of ultimate success may cause competitive nations 
to imitate and extend it. The present disposition and 
tendency of greater nations to mitigate their tariffs, by 
reciprocity, in the wider interests of civilization may find 
in the new Japanese system a check, and a reversion to 
tenets which broader humanitarian spirit of the times con- 
siders antiquated and deplorable be among its results. 

In promulgating her new system Japan uses both the 
direct and indirect methods — that is, ownership and sub- 
sidy; which clearly indicates that the end, and not the 
means, is at present the chief consideration, since analysis 
of the two methods reveals Inconsistencies, even antag- 
onism. Of the two methods, the subsidy, either by di- 
rect financial bonus or protective tariff, now covers the 
wider field. In applying these long-used devices to the 
development of her industry Japan has invented nothing; 
in fact, I have yet to discover the true germ of in- 
vention In any of her material activities. But she has 
gone further than western nations usually venture, and 
has taken advantage of circumstances in ways outside 
the pale of business standards set by the West. I re- 
fer to the wholesale confiscation of commercial reputa- 
tion and good-will, as represented by copyrights and trade- 
marks, which Japanese manufacturers and tradesmen have 
so freely exercised In recent years. It Is not necessary to 
here review this old charge: but It Is vital, and will not 
down until corrected. Even In Industries owned by the 
Government this abuse has a foothold, particularly In the 
manufacture of arms and military and naval supplies. 

By her use of direct subsidies Japan is covering a wide 
field. In manufacturing, various textiles are subsidized, 
particularly cottons ; in agriculture numerous raw products 



JAPAN'S NEW ECONOMIC REGIME 21 

are encouraged and assisted, and in transportation the 
large shipping companies virtually have become a part 
of the Government, so closely are their policies connected. 
The Government, through the banks, which are able to 
use public funds to bolster private credit, has encouraged 
and assisted in the importation of machinery, to be used 
in inaugurating new industries and extending old ones. 
In some of these enterprises the Government is reviving 
projects which previously have failed under private direc- 
tion, and even Government control; as the steel industry, 
and some dock and ship-building plants. Every effort 
is made to discover natural resources of the country that 
are susceptible of profitable development, and wherever 
such are found the Government has been ready to pro- 
mote, at least indirectly, a company to exploit it. 

But Japanese statesmen realize that it is one thing to 
make products and another to sell them. The market in 
Japan can to some extent be controlled by handicapping 
foreign products through a tariff : but Japan's goal is 
commercial supremacy in the whole East, and this means 
that she must meet competitors in regions where she has 
not yet secured the advantage of political control. So she 
is devising ways and means to defeat this competition, and 
some of them are extremely interesting and significant. 

An agency employed in pushing Japanese commerce 
outside the national boundaries is the transportation facili- 
ties at the command of the Government. These facilities 
now amount to a monopoly by land and sea. The Gov- 
ernment owns and operates all the railways ; and the great 
shipping companies, such as the Nippon Yusen Kaisha, the 
Osaka Shosen Kaisha and the Toyen Kisen Kaisha, are 
directly subsidized and practically a part of the Govern- 
ment system. Combined the three great subsidized com- 
panies operate more than 200 vessels, with a total tonnage 



22 THE FAR EASTERN QUESTION 

of over 400,000 tons. In creating and holding up her 
merchant marine Japan subsidizes all along the line. To 
vessels built in Japan a special subsidy is granted, and 
material for their construction which must be imported 
from abroad Is admitted free In most cases. When ships 
are put into commission they are again subsidized; In the 
case of the Nippon Yusen Kaisha, to the extent of 100 per 
cent, on the actual Investment, and 34 per cent, on Its pres- 
ent capitalization. So, should circumstances make It de- 
sirable or necessary, these companies are able to operate 
without ordinary revenue. 

An Important factor of the new economic movement Is 
the tariff law which went Into effect on October i, 1906. 
At the time this measure was proposed and during the 
period when It was being considered by the Diet an at- 
tempt was made by the Government to give an Impression 
In Japan and elsewhere that it was solely a revision for 
revenue, but In its finished form it Is unmistakably revealed 
as a protective tariff, and evidently Is one of the forces 
by which Japan hopes to assure to herself commercial and 
Industrial supremacy In the East. Examination of the 
new schedules clearly reveal the protective Intent. How- 
ever, like other of Japan's new activities, it is by no 
means certain that a protective policy will be an unmixed 
benefit. A protective tariff In Japan, like such institutions 
elsewhere, has Inherent In It and will develop opposing and 
detrimental forces. Indeed, such opposition appeared 
before the bill became law, notwithstanding a peculiar po- 
litical situation which handicaps outspoken opposition to 
the Government. The popular cry is for a new Japan, 
and persons who think that measures proposed by the Gov- 
ernment are unwise are apt to be shouted down as 
opponents of national advancement. This especially is 
true of arguments designed to demonstrate weakness 



JAPAN'S NEW ECONOMIC REGIME 23 

in the Government's policy which may penetrate abroad. 
Such opponents have been accused of lending their influ- 
ence to break down the national credit, and in the ebulli- 
tion of intense nationalism which followed the war this 
cry was quite enough to discomfit the average Japanese 
politician and business man. Nevertheless, influential sec- 
tions of the press and public always have been bitterly 
hostile to the new economic tendency, and while this op- 
position proved futile because the Government was able, 
for the moment, to mask its protective policy behind its 
revenue necessities, it is certain to gain cohesiveness and 
strength. 

There are men in Japan who are not easily swayed by 
such restraining influences. Among these is Count Okuma, 
who is too strongly entrenched in popular esteem to 
be easily assailed and too advanced in years to have 
selfish ambitions. He frequently voiced the views of the 
opposition both in and out of the Diet. In a speech at 
Osaka in 1906 he warned the nation against too hastily 
embracing the protective policy, and said: 

" Those in favor of a policy of protection for Japan 
too often mean by the phrase a policy of retaliation, and 
retaliation can work both ways. Japan at present pro- 
duces nothing which the world cannot do without, and it 
therefore follows that Japan's policy should be to place her 
goods upon the foreign markets at the lowest possible price, 
avoiding as far as possible giving cause for retaliatory 
duties against her. . . . The main point as to the 
origin of the increased revenue expected from the customs 
duties when Japan recovers her tariff autonomy and finally 
launches out into a protective policy. Apparently golden 
hopes are placed upon the results of this deliverance. It 
has even been stated that one cause of the high tax on land 



24 THE FAR EASTERN QUESTION 

is largely due to the control which the foreign Powers 
have so long exercised over the Japanese tariff and, by 
implication, that the recovery of tariff autonomy will en- 
able the farmer to eat his own rice. For this to happen 
we must conclude that, after deducting the expenses of 
collection, the whole of the customs duties are net profit 
to the government; or, in other words, that the duties 
are paid by the country from which the goods are im- 
ported. That this is not the case is at once seen by the 
fact that an increase of duty means a rise in the price 
of an article in the country imposing the duty, and this to 
the actual consumer often amounts to proportionately 
more than the rise in duty. In those cases the consumers 
pay the duty themselves, and the customs revenue, so 
far from being a national asset, is merely another form 
of taxation, paid by the people." 

This briefly outlines the new Japanese business system. 
I have not now attempted to demonstrate its merits and 
demerits, but merely have sketched its principal features. 
In it the paternal idea is carried nearer to its logical con- 
clusion than recently has been exhibited elsewhere on a 
broad scale, and the world will watch eventual re- 
sults with interest, perhaps with some anxiety. One 
way of looking at it, this system is ideal. It places all 
major national activities under a common direction, 
presumably the best the nation can supply; in Japan it 
centralizes administrative authority in the hands of a score 
or so men. If we assume that these men will decide 
wisely in all or a majority of matters they are called 
upon to direct we may anticipate a great success. The 
plan probably will be a substantial success or a substantial 
failure; for If, perchance, the wrong path is taken, every- 
thing may go down together. It is apparent that activl- 



JAPAN'S NEW ECONOMIC REGIME 25 

ties that are not included In the scope of governmen- 
tal encouragement will suffer detriment by comparison, 
and many economists believe that commerce and industry 
thrive best when left free to follow their natural bents. 

One cannot fail to be impressed by the energy and en- 
thusiasm with which Japanese threw themselves into 
the national expansion movement. The national spirit en- 
gendered by the war was, in the beginning, cleverly 
shifted by Japanese statesmen into the pursuits of 
peace, where for a time it was directed by the same skill 
which carried to success the military and naval operations. 
But war and peace are different conditions and, in the 
course of history, usually have required different manage- 
ment. Even in war, as it progresses, enthusiasm subsides 
and belligerency becomes mechanical, its incentive being 
chiefly supplied by discipline. In its earlier stages Japan's 
new regime assumed a decidedly belligerent attitude. 
The people were summoned to Its support as by a call 
to arras, and with the Intoxication of victory still coursing 
through their veins they responded. A reaction was in- 
evitable, but this Initial enthusiasm, while it lasted, gave 
to the movement a tremendous Impetus. 

The sudden industrial expansion which was chiefly 
caused by the new policy bore from the first, to those 
who looked beneath the surface, an unstable aspect. It 
Is evident that it was based upon the same resources and 
opportunities, so far as' Japan proper is concerned, as ex- 
isted before the war, for the national wealth and resources 
were not Imraediately Increased by the war. The land and 
people remain practically the same. Every country Is con- 
stantly going through a process of evolution which offers 
opportunity for creation of new Industries. This proc- 
ess, however, usually Is gradual. Great and sudden ad- 
vances of capitalized wealth sometimes have been made 



26 THE FAR EASTERN QUESTION 

in other countries, as, for instance, in the United States; 
but this always has been the result of a general increase 
of wealth, and has followed, not preceded prosperity. 
Japan seemed to wish to capitahze her victory over 
Russia before its effect upon the imagination of the 
world waned, and before some of its fruits turned to 
Dead Sea apples in the mouths of western nations. She 
could not wait upon prosperity; she must anticipate it, 
and reap its rewards, if possible, before it really had ar- 
rived. That such a policy is fraught with perils as well 
as favorable possibilities is plain, and there were Japa- 
nese who pointed out dangers in its path; but optimism 
and self-confidence carried the day, the policy was launched 
with flying colors, and the Japanese people then had no 
choice, apparently no wish except to support it. 



CHAPTER III 
JAPAN'S FOREIGN TRADE POLICY 

Broad Political Purpose Involved — Japan's Geograph- 
ical Position — Its Relation to this Question — Japan's 
Aspiration to Oriental Leadership — Premises of Indus- 
trial Control — Political Domination Important — Eco- 
nomic Elements — Competition to be Met — Oriental 
Obstacles — Japanese Methods — Legitimate and Ille- 
gitimate Methods Considered — Their Application to 
Asia — International Bearing — A Hypothetical Ex- 
ample — Japan and China — The Lion in Japan's Way — 
Interest of the West in This Problem. 

Probably no phase of Japan's post-bellum activities is 
more illuminating than the relation of the Government's 
foreign trade policy to her- national ambitions and de- 
signs. This lends peculiar interest to the methods, in so 
far as they have found practical expression, which recently 
have been employed to promote Japanese industry and 
commerce throughout the East; for these methods are in 
themselves a revelation of national characteristics and 
point of view, and also are significant as indicating the 
fundamental trend of a broad political purpose. 

Economists who have made a study of the subject agree 
that Japan's geographical situation and natural resources 
inevitably will limit advancement of the nation in com- 
parison with some others unless she manages to secure and 
retain a leading industrial position in the sphere of her 
probable influence. It may be that some Japanese states- 
men, in projecting their imaginations into the future, have 

27 



28 THE FAR EASTERN QUESTION 

a vision of a revivified East under Nippon's leadership 
making an industrial conquest of the West, but It is not 
now feasible for this idea to take practical shape. If 
it ever should be possible, two things must first be brought 
about: industrial reorganization of the Orient, and the 
establishment of Japan in a position of leadership. From 
the present Japanese point of view, for the first con- 
dition to come about except in conjunction with the second 
will be a calamity tO' Japan, since it will establish her in 
an inferior position by awarding first place to a rival. As 
political entities are now organized in the East, it Is clear 
that Japan has there only one serious rival for industrial 
supremacy, which In this case is likely to carry with It po- 
litical supremacy. This is China; which makes industrial 
domination of China an objective of Japan's economic 
policy. 

In competition for Industrial superiority between na- 
tions, either of two major conditions may decide the Is- 
sue: advantages of location and natural resources, and 
political control within the area of operation. For In- 
stance, if Japan now had undisputed political control 
over eastern Asia the question of leadership in that part 
of the world, as between Oriental nations, would perhaps 
be permanently settled. But the greater part of eastern 
Asia is now politically controlled by China, and If this 
condition continues any competition between Japan and 
China for commercial and industrial superiority will de- 
pend upon their comparative resources and the use to 
which these are put. 

As to natural resources of Japan and China, the 
divergence Is so great that comparison hardly Is possible. 
In every material matter which applies to the proposition 
China has enormous fundamental superiority. In respect 
to Inanimate resources, she possesses abundantly within 



JAPAN'S FOREIGN TRADE POLICY 29 

the borders of the Empire almost all elements which 
enter into modern industrial production; and her people 
are as capable and far more numerous than the Japa- 
nese. Of natural resources which play an important and 
essential part in modern industry, Japan produces none 
to any considerable degree, and it is not probable that 
she ever can do so economically in comparison with other 
countries. Any great industrial development in Japan 
necessarily will depend upon raw materials imported from 
abroad. In this, Japan's situation is similar to that of 
England ; and hope for success lies in her ability to create 
a condition by which she economically can manufacture for 
the Orient. To bring raw material to Japan, manufacture 
it there, and export the finished products to other 
countries is quite feasible in a practical sense : but whether 
it is economical will depend upon conditions and the com- 
petition which is encountered. 

In the case of Japan, this competition assumes two 
forms : Oriental and Occidental. In making a bid for in- 
dustrial supremacy in the East, Japan enters into compe- 
tition v/ith a West long familiar with modern usages of 
commerce and production, and whose machinery for car- 
rying forward this work already is organized and in good 
order. Such progress as Japan has made in modern in- 
dustry, which is considerable, indicates that it will be 
many years before she can develop efficiency equal to the 
West as expressed in the output of human units. De- 
velopment of economic superiority will largely depend, 
therefore, upon cheaper labor. Japanese labor really 
is not as much cheaper than western labor as the dif- 
ference in wage scale intimates, but there is no doubt 
that Japan thinks she now has an advantage in this matter 
which will help to offset obvious disadvantages elsewhere. 
In the United States Japan has an industrial competitor 



30 THE FAR EASTERN QUESTION 

which produces at home the greater part of raw materials 
needed for extensive industrial organization, and which has 
cheap and convenient access to eastern Asia; benefits not 
possessed in the same degree by any European nation. 
Recognition of this has led Japanese economists to regard 
America as Japan's most formidable future competitor 
among western nations. 

Oriental obstacles to complete success of Japan's pol- 
icy take somewhat different shape. Here China looms 
as the more prominent, in fact the decisive factor. In the 
whole East China can better and more cheaply produce the 
raw materials which Japan requires, and China also pro- 
vides the more capacious and promising market for Japan's 
manufactures. Thus, in the plan now outlined, China 
is assigned the parts of both producer and consumer for 
Japan's industrial expansion. As China has plenty of 
cheap labor herself, will she not, if left to follow her 
natural course, prefer to develop an industrial system of 
her own rather than be dependent upon Japan? Should 
China answer this question affirmatively, she evidently 
will be In a position of vantage in comparison with Japan 
unless the latter can devise and execute ways and means 
to Influence China's course. 

This glance at fundamental elements which are in- 
volved will, perhaps, afford a clue to some manifestations 
of Japan's new policy as revealed by actions of the Govern- 
ment in Japan and on the continent of Asia. The 
means which are employed by Japan to develop her in- 
ternal Industrial system and Its necessary continental ad- 
juncts of market and supply may be separated into two 
classes — legitimate and Illegitimate, as these terms ordi- 
narily are understood in the West. The chief legitimate 
m.ethods are: (a) protective tariffs, (b) subsidies, (c) 
financial support, (d) free transportation of products, (e) 



JAPAN'S FOREIGN TRADE POLICY 31 

rebates and bonuses on exports, (f) organization and 
centralization under Government direction. The princi- 
pal illegitimate methods are:- (a) secret remission of 
taxes and duties, (b) secret rebates of transportation 
charges, (c) exercise of military and political authority to 
handicap competitors, (d) imitation and counterfeiting of 
competing articles. 

It may be well here to state that these allegations are 
not based upon actions or characteristics of individual 
Japanese or even of leading Japanese firms, but should be 
distinctly understood to apply to the Government of 
Japan; and in submitting some specific instances to illus- 
trate the matters under discussion, only such as can be 
laid directly at the door of the Government will be 
mentioned. 

Of legitimate methods, it may be said that all of 
them are used, in some form, by western nations for a 
similar general purpose; but Japan has carried the cen- 
tralization theory farther in practice than is usual in the 
West. The Governmenf now owns the railways and 
controls the greater steamship lines; by substantial control 
of the greater banks it dominates the finances of the 
nation; it has monopolized several important industries; 
by partial ownership and by means of various forms of 
subsidy it controls many of the larger industrial enter- 
prises; and by concentrating these powers and through 
ability to tax the people for their support, the Government 
can throw the weight of the national energy in any di- 
rection it seems desirable that it should take. As an ex- 
ample of stimulation of industry by this method may be 
cited the budding cotton manufactures of Japan, and I 
quote from a recent United States consular report on this 
subject: 



32 THE FAR EASTERN QUESTION 

" The most Important phase of this question of gov- 
ernment aid to industries in Japan, and especially to cot- 
ton manufacturing, lies In the fact that the entire Govern- 
ment is behind the Industry In so many ways as to make 
It to all Intent and purpose, so far as international com- 
petition is concerned, a Government industry. The Gov- 
ernment sustains this industry; first, by protective tariff; 
second, by organizing a trust for marketing the goods; 
third, by advancing money to carry on the enterprise at 
43^ per cent, interest; fourth by cheap rates of trans- 
portation on lines controlled by the Government. With 
these various methods of support it is clear that foreign 
cotton manufacturers expecting to hold their trade in the 
Orient must meet practically the Government of Japan 
as a competitor. I am fully convinced that this govern- 
mental policy will not only continue, but will be expanded 
to cover many other lines of Industrial development." 

It may be conceded that any government Is at liberty 
to adopt such a policy with a view to promoting Its internal 
development, and other nations cannot consistently com- 
plain, since they also are at liberty to adopt similar or con- 
travening measures. I am Inclined to think that this 
policy, carried to Its logical conclusion, will in time of 
Itself create antagonistic forces which will nullify, per- 
haps wreck It; and while competing nations should not 
neglect to examine what the possible effects of Japan's 
new pohcy may be, there Is no immediate reason why the 
West should be seriously alarmed at its legitimate man- 
ifestations. But the illegitimate methods must be dif- 
ferently regarded. 

While Illegitimate attendants of Japan's trade policy 
operate Internally to the disadvantage of foreign trading 
nations, their more striking and irritating effects spring 




Head Office of the Yokohama Specie Baxk at Yokohama. 



JAPAN'S FOREIGN TRADE POLICY 33 

from manifestations noticeable in Asia. In Japan 
foreign traders may feel injured by certain conditions, and 
complain to the Government, but if satisfaction is re- 
fused they have no alternative except to submit ; for 
Japan's right to regulate her internal affairs hardly can 
be questioned by foreigners, however objectionable some 
conditions may be. In the matter of imitation and coun- 
terfeiting of foreign trade-marks in Japan, there are indi- 
cations that the Government at last intends to take action 
to protect foreign manufacturers and merchants; al- 
though It appears that need to reassure foreign exhibi- 
tors at the next Tokyo exposition is partly responsible 
for this moral awakening. But on the continent, and 
especially in China, other foreigners presumably are on 
the same footing as Japanese, and are not disposed to 
permit Japan to arrange matters to her satisfaction in 
contravention of other foreign interests. The application 
of Japan's policy to Asia is, therefore, an international 
affair. 

The means of directly applying this policy to Asia are 
control of transportation lines plying to and entering the 
continent, such as the Japanese steamship lines and the 
Japanese Government railways in Korea and Manchuria; 
and control, by military occupation or indirect exercise of 
political authority, of portions of continental territory, and 
of continental entry ports. Possibly the means employed 
to promote Japanese interests on the continent, and the 
relation of the Japanese Government to this matter, may 
best be briefly illustrated by example; and in presenting 
a hypothetical case I make use of conditions which I 
know, in the sense of being absolutely convinced by posi- 
tive and circumstantial evidence, to represent facts. Let 
us, then, trace some Japanese article of commerce through 
Its process of production and then to a market in Asia. 



34 THE FAR EASTERN QUESTION 

For the article cotton will answer, since it is a staple 
directly supported by the Japanese Government, and 
some of the mills are controlled by the Imperial House- 
hold. 

The raw cotton will be brought from India, America 
or China by the Nippon Yusen Kaisha (owned by the 
Imperial Household and government subsidized) ; it enters 
Japan free, or has a duty rebate; it is manufactured into 
goods by the Nippon Spinning Company (a subsidized 
industry in which the Imperial Household is interested) ; 
it is exported to Manchuria under a bonus paid by the 
Government; it is carried to Manchuria by the Osaka 
Shosen Kaisha (a subsidized steamship line in which the 
Imperial Household is interested) ; it enters Manchuria 
through a port controlled by Japan, and where the duty 
is removed altogether or secretly rebated; it is trans- 
ported to the interior by the South Manchurian Rail- 
way (owned by the Government) at reduced rates; it is 
sold in Moukden, let us say, by a Japanese shopkeeper 
who, owing to Japanese mihtary control of the country, 
does not have to pay local taxes, and who enjoys other 
immunities; its sale is further encouraged by one of two 
forms of trade-mark imitation, either a counterfeit of a 
competing article which is familiar and popular among 
Chinese consumers, or by pushing an imitation of in- 
ferior quality into the market for the purpose of under- 
mining the reputation of the competing article which 
is thus counterfeited; and the Japanese merchant is af- 
forded further advantage through manipulation of the 
currency by a Japanese bank. 

I do not, of course, wish to be understood as con- 
tending that all articles, or any of them, have applied 
to their introduction to the continent all the various forms 
of encouragement mentioned in this Illustration; but 1 



JAPAN'S FOREIGN TRADE POLICY 35 

assert that all of these forms have at times been applied 
to stimulation of Japanese trade in Manchuria, and 
sometimes to articles in which the Japanese Government 
has a monopoly. A similar policy also has operated, 
under somewhat varying conditions, in Korea. In other 
parts of China it has not been possible to apply some of 
the " encouragements " indicated, for the political 
control required to make them effective is lacking; but 
in the important matters of marine transportation and 
imitation of competing articles Japan's method has in 
the last three years left its footprints throughout the 
whole East. 

One instance of illegitimate promotion of Japanese 
trade in China which has come definitely to my notice 
is peculiarly significant in several ways. Early in 1908 
a foreign trading firm in the East discovered that one 
of its new " chops " specially designed for the Chinese 
trade, and which was duly registered at Peking (which 
is all the protection possible now to give foreign trade- 
marks in China), at Tokyo and in other countries, 
was being imitated. The imitation, which was of an arti- 
cle monopolized by Japan in her own territories, was 
quickly traced to its source ; whereupon the foreign firm be- 
gan a correspondence with the Japanese Government, po- 
litely calling its attention to the matter. The Japanese 
monopoly replied, expressing regret at the occurrence, 
which it attributed to error rather than intent, and giving 
assurance that the offending " chop " would be withdrawn 
except from Japan's territories, where, owing to the ex- 
istence of a monopoly, its competition will not injure the 
original. With this reply the foreign firm was forced to 
be content; but it soon learned that the imitation article was 
still actively being pushed in Korea and Manchuria. An- 
other protest was addressed to the Japanese monopoly, 



36 THE FAR EASTERN QUESTION 

which was reminded of its previous assurance. To this 
the monopoly rephed that it does not consider that its 
promise to withdraw the " chop " applies to Korea and 
Manchuria, intimating a refusal to act further in the mat- 
ter. This incident is extremely interesting on account of 
its tentative assumption that Japan's monopolistic rights 
apply to Korea and Manchuria, as well as being illustra- 
tive of her official attitude toward certain phases of com- 
mercial ethics. 

In scrutinizing some aspects of Japan's trade policy, the 
fact that many of the major industries which are being ac- 
tively pushed by all the force at the command of the Gov- 
ernment must depend upon China for raw material compels 
attention. This especially is true of the two great staples, 
cotton and iron. It is clear that should China ever fully 
recover her political and fiscal autonomy she may interpose 
a protective tariff of her own between her infant industries 
and Japanese competition, which, with ample labor and 
raw material ready to hand, might establish her superi- 
ority. China already is waking to Japan's attempt to 
monopolize the shipping trade of the Far East, and the 
China Merchant's Company, which is controlled by the 
Government, is preparing to extend its service to Europe 
and America. I was informed that an American ship- 
ping line in the Pacific has been approached with a view 
to the establishment of a working agreement with the 
China Merchant's Company to compete with Japanese 
lines, and it is by no means improbable that something 
of this nature will occur. The American line in question 
Is now In an agreement with one of the Japanese subsi- 
dized lines, but it Is known that the latter frequently 
violates its agreement by granting secret rebates to ship- 
pers. Japan's announced intention to dominate the carry- 
ing trade of the Pacific (as per Nippon Yusen Kalsha 



JAPAN'S FOREIGN TRADE POLICY 37 

annual report, 1906) caused uneasiness among American, 
British, German and French Hnes which ply to the East, 
and subsidies are by some advocated as the only way 
to prevent American and other western shipping from 
being driven from the Pacific. One hardly knows what 
view to take of this issue. It is not clear how American 
trade with Japan and China will suffer as long as the Gov- 
ernment of Japan taxes Japanese to carry our goods 
cheaper than they can be transported by American ships. 
But it is contended that as soon as Japan has, by cutting 
under western lines, driven them from business in that 
part of the world, she will begin a process of secret dis- 
crimination against foreign cargo which will give her in- 
dustries decisive advantage. There is much in Japan's 
past and present actions that sustains this presumption. 
That China has no mind to yield eastern waters undis- 
puted to Japan is shown by tentative activity of the China 
Merchant's Company. 

In pursuing her ambition to commercially dominate 
the East Japan now finds, in addition to China, a lion 
in the way. This is the United States. If American 
diplomacy actively interests itself in preserving the integ- 
rity of China and the " open door," it will be very dif- 
ficult for Japan's policy to continue to make headway. 
I am continually astounded at the attitude of some Am- 
erican public men and newspapers toward this matter. 
Many seem to assume that Japan's aspiration to dom- 
inate China is entirely " legitimate," and apparently are 
oblivious to the fact that, assuming this to be true, it 
is at least equally " legitimate " for China to prefer 
to manage her own affairs, and for nations whose interests 
may be adversely affected by her disintegration to exer- 
cise their influence to preserve her. One who is familiar 
with both peoples and countries well may wonder what 



38 THE FAR EASTERN QUESTION 

Japan's alleged title to Oriental leadership rests upon. 
That Japan must find an outlet for her multiplying coolie 
population, which surely will be rejected by the West, may 
be admitted; but her right, in sending them abroad, to 
make them pioneers of her political advancement is ques- 
tionable. China may receive these Japanese willingly 
enough, but she will entirely absorb them unless extraor- 
dinary means to preserve their racial and national soli- 
darity are employed, and this can be done only through 
direct application of Japan's political sovereignty. 

The West, which has more than a commercial interest 
in the solution of these issues, well may consider whether 
further extension of Japan's trade policy, as expressed 
by its prevailing commercial ethics, can be reconciled to 
western interests in the East. 



CHAPTER IV 
JAPAN'S FOREIGN RELATIONS 

Present Demoralization — Possible Effects Upon 
Other Nations — Japan's Modern Foreign Policy Ex- 
amined — Its Origin and Development — After Effects 
of the Peace Treaty With Russia — Fall of the Kat- 
suRA Cabinet — Hayashi's Administration of Foreign 
Affairs — Basic Principle of His Policy — Its Chief Ob- 
jective — Relations With China — Diplomatic Moves 
and Errors — Disintegration of Hayashi's Policy — Rea- 
sons for Its Failure — Decline of Japan's Prestige — 
Her Rupture With America — Effects of This Incident 
— The Attack Upon Hayashl 

That the years 1907—8 witnessed a serious demorali- 
zation of the foreign relations of Japan, by undermin- 
ing sentiments and behefs which formerly gave them vi- 
tality, is becoming recognized in Japan, and must by now 
be partly appreciated throughout the world. 

This condition is, in its application to other nations, 
one of the more striking results of Japan's modern inter- 
national policy, and the' combination of circumstances 
which has brought about the situation that now exists 
provides an interesting field for investigation and specu- 
lation. The policy may be separated into two periods: 
one of origin and development, and one of reaction and 
decline. Hardly more than two years sufficed to accom- 
plish this transition, to which great importance is attached 
both because of its revelation of a nation's ambitions and 
capacity, and on account of its possible culmination. 

39 



40 THE FAR EASTERN QUESTION 

That the foreign relations of Japan rather than her 
internal affairs chiefly have occupied her statesmen since 
the Russo-Japanese war is indicated by many contributing 
evidences, and seem to have been the first concern of the 
Government. The war merely was a step toward a goal 
which does not lie within the reach of Japan's purely 
internal activities, and it was necessary to pave the way 
for the next step. The conclusion of peace, however, 
precipitated an internal political crisis. The Portsmouth 
treaty was very unpopular in Japan, and led to the down- 
fall of the Katsura cabinet, and the decline of the polit- 
ical influence of Count Komura, who had steered the na- 
tion through the war. In the administrative reorganiza- 
tion which followed, Marquis Saionji became premier, and 
Viscount Hayashi, fresh from his successful conclusion of 
the new Anglo-Japanese alliance, took the portfolio of 
Foreign Affairs. It may be said, then, that development 
of Japan's expansive pohcy took place under Hayashi's 
administration, and no matter to what extent he person- 
ally contributed to certain diplomatic moves and their 
results, he was required to publicly assume responsibility, 
and became the target for attacks of the opposition in 
the Diet. 

The basic principle of the policy which Hayashi was 
called upon to promote is the economic and commercial 
domination of the Far East by the use, if occasion re- 
quires, of the military and naval strength of the nation, 
and by maintenance of foreign relations which will not 
actively hinder, if they cannot be induced actually to 
favor such a consummation. Although there are numer- 
ous collateral issues, the crux of such a policy turns upon 
the fate of China; hence the relations of Japan to China 
became an important consideration. In establishing rela- 



JAPAN'S FOREIGN RELATIONS 41 

tions with China which might lead to eventual fruition 
of Japan's ambition, either of two courses was open: 
To endeavor to attain the desired end by concihation; or 
to depend upon diplomatic intrigue backed, if necessary, 
by force. There are well-defined evidences that, in the 
early days of the Saionji ministry, there was a strong 
section which favored the first mentioned policy, and for 
a time a middle course was pursued. It is, however, no 
longer possible to doubt that for some time the latter 
policy has been definitely in the saddle; indeed, it is doubt- 
ful if an alternative ever was seriously contemplated, al- 
though international expediency may have for a time held 
the Government, at least outwardly, in check. 

The diplomatic moves by which Japan has com- 
promised anticipated western obstacles to her policy in 
eastern Asia, except with the United States and Germany, 
will be reviewed later; but the relations between Japan 
and China, which seem to be rapidly moving toward a 
climax, require consideration. In any domination of 
China by Japan, complete political control of the former 
by the latter would be the ideal condition, and may be 
assumed to be Japan's ultimate theoretical objective. It 
Is clear that such a condition, assuming its accomplishment 
to be possible, will take a long time to bring about. If 
only China was to be considered, complete political 
control of all her territory by Japan probably could be 
brought about by a war begun before China acquires 
modern military efficiency, although such an undertaking 
would not be so easy as may appear on the surface. But 
It Is highly probable that any present attempt on the 
part of Japan or any other nation to accomplish a military 
conquest of China would encounter active resistance from 
other quarters. So Japan has felt It prudent to, for the 



42 THE FAR EASTERN QUESTION 

moment, be content by establishing herself in possession 
of that part of China's territory which she now controls, 
and in pushing her interests throughout the Empire. 

It was in doing this, or rather in failing to act with 
enough circumspection, that Japan's foreign policy came 
to grief; and that the apparent stones over which it has 
stumbled do not lie in China and are not outwardly as- 
sociated with conditions there does not alter the fact that 
in Japan's attitude toward China lies the real difficulty. 
But as seemingly extraneous matters have provided the 
more obvious manifestations of the relative decline of 
Japan's diplomatic position in the world, it is interesting 
briefly to follow the recent course of some of them. 

Among these the questions which have disturbed the 
relations of Japan and the United States are the more 
important, since they and some of their results have di- 
rectly contributed to place Japanese diplomacy in the diffi- 
cult position it now occupies. It is probable, almost 
certain, that a revulsion in American popular sentiment 
toward Japan would have come in time even if noth- 
ing specifically to strain it had occurred. A reaction 
from the inflated notions of Japan and things Jap- 
anese which prevailed in the West at the end of the 
war with Russia was inevitable. No nation on earth, 
assuming that it deserved the reputation Japan then 
popularly enjoyed, could have lived up to it. That such 
exaggerated conceptions of Japan never were correct is 
perhaps now realized by intelligent westerners; but it is 
probable that Japan would have been able to utilize for 
several years yet in a practical political way the immense 
advantage which it gave to her, and perhaps to have 
avoided a violent reaction even then, had she not short- 
sightedly elected to spring a diplomatic diversion upon 
the United States in the California school incident. 



JAPAN'S FOREIGN RELATIONS 43 

A comparatively short time has passed since this matter 
was thrust into the international limelight, but it has been 
quite long enough to Intimate that it may be one of those 
minor diplomatic blunders which sometimes, by setting 
Into motion greater forces, exercise a decisive effect upon 
the fate of nations. It was difficult, I found, to discover 
in Tokyo the man who conceived the Idea of giving the 
school matter international prominence. No one is now 
wiUing to father this discarded diplomatic foundling. 
In following the concerted attempt, recently, to give to 
the world an Impression that cordial relations between 
Japan and the United States now are entirely restored, 
it was interesting to note that the school question was 
entirely ignored. The Japanese Government organs, In 
rushing to the defense of Viscount Hayashi's administra- 
tion of foreign affairs when it was being criticized In the 
Diet, almost unanimously selected as the important ques- 
tions with which he dealt the following: emigration to 
the United States; emigration to Canada; and the nego- 
tiations with China in regard to Japan's position In 
Manchuria. No resume by any Japanese pro-Govern- 
ment newspaper of the major diplomatic Issues of the 
HayashI regime mentioned the San Francisco school 
Incident. 

The foregoing enumeration of greater Issues of the 
HayashI administration is estimated in correct perspec- 
tive, In the light now thrown upon them; although it may 
strike some as significant that the recent Russo-Japanese 
and Franco-Japanese agreements were not considered suf- 
ficiently Important to be Included. The question of 
Manchuria is fundamentally the more important of the 
three Issues mentioned; but it hardly would have reached 
its difficult (to Japan) state had not China, taking 
heart as she observed a deterioration of Japan's Influ- 



44 THE FAR EASTERN QUESTION 

ence in the West, assumed a more determined attitude 
and actively set to work to secure, through her diplo- 
macy, moral support against the aggressions of her 
Oriental neighbor. The question of Japanese immigra- 
tion to Canada has, coupled with other manifestations 
of Japan's new policy, had the effect, whatever British 
statesmen may assert to the contrary, of in a large 
degree destroying the popularity of the Anglo-Japanese 
alliance among British subjects; which means that it now 
has slight practical value to Japan in supporting her 
attitude toward China in the event it brings her into col- 
lision with a great western power. And there would 
probably have been no Canadian immigration question 
had not the same issue arisen with the United States, for 
one is clearly a result and concomitant of the other. 
The practical destruction of the moral support to Japan 
which the alliance with England formerly afforded has 
caused, also, a weakening of the ambiguous agreements 
of Japan with Russia and France, which at best are of neg- 
ative value, and depend for effect upon Japan's relative 
international position. Talk of a possible war between 
Japan and the United States not only has arrested the 
tide of pro-Japanese sentiment in the West, but has se- 
riously crippled Japan's credit in England and Europe, 
and practically destroyed it in America. And the im- 
migration question in America might not have assumed 
definite shape for several years had not Japan raised the 
school question. What wonder, then, that it cannot now 
find a political father in the Tokyo administration ? 

It is realization of the disastrous effect which the 
quasl-rupture with America has had upon her foreign 
policy as a whole that now makes Japanese statesmen 
so sincerely anxious to settle matters under discussion 
between Japan and the United States, and to have it 



JAPAN'S FOREIGN RELATIONS 45 

understood throughout the world, and especially In China, 
that no cloud now hovers over the relations of the two 
nations. Among Japanese Interests which would be ef- 
fected by prolongation of the " situation " with Amer- 
ica Is the Imperative necessity presently to borrow money 
abroad. Several emergency war loans will soon become 
due. They can be liquidated only by refunding, which 
means that Japan must again borrow in the foreign money 
market. Since for western financiers to refuse to lend 
her anything would almost certainly precipitate a finan- 
cial panic in Japan, and depreciate Japanese debentures 
and securities held abroad. It is probable that other 
loans for the purpose of refunding can be secured; but 
the conditions will be affected by Japan's position before 
the world. A project to have the Crown Prince 
visit Europe about the time the attempt to market 
new loans is made was mooted, but there are two 
objections to such a maneuver. It is probable that this 
method of stimulating her foreign loans has already been 
overworked by Japan for one thing; then the Crown 
Prince Is the son and grandson of a concubine, and astute 
Japanese diplomats are doubtful of how this Incidental 
fact may be regarded by the Almanach de Gotha. Japan 
is just waking to what a valuable asset she lost when 
American public opinion began to turn from her, and she 
is anxious for many reasons to restore herself to favor. 

It already Is evident that It Is In China that Japan 
will feel the deeper effect of her decline in the estimation 
of the West. It might have been possible for Japan to 
have conciliated China, and In time to have secured a 
commanding position on the continent without resorting 
to intimidation or force. But It may be that Japanese 
statesmen surveyed the field and decided that there is 
not enough time at her disposal to permit slow-moving 



46 THE FAR EASTERN QUESTION 

diplomacy to work out its end. Japan must act when 
the opportunity presents, or perhaps see it pass forever. 
And there is httle doubt that In taking this view of the 
situation Japanese statesmen judged correctly. Should 
China ever get firmly upon her feet, Japan's dream of 
being the premier nation In the Orient will fade away; 
which means that the Issue probably must be decided be- 
fore ten years have passed. So there we have, it seems, 
a danger period in the East, in so far as Japan's influ- 
ence will actively and powerfully operate, definitely in- 
dicated. 

In this connection the relations between China and 
the United States have intense Interest to Japan. Japan 
knows that her policy is chiefly responsible for the condi- 
tion which is causing China to turn to the United States, 
and which makes possible a reorganization of the inter- 
national balance of power In the Pacific which will have 
the effect of restricting Japan's ambitions. The existing 
situation Indicates that Japan will have a breathing spell 
before her continental policy Is called before the Inter- 
national court, and that she will devote the Interim to an. 
attempt to repair her diplomatic fences and regain some 
of the ground she has lost confidently may be assumed. 
It Is evident, from political signs to be observed In Japan, 
that Japanese statesmen count upon this interval. 

The attempt by the Progressist party, in the spring of 
1908, to Impeach the foreign policy of the Government 
embarrassed the Saionji ministry and was among the 
causes for its resignation. It was not at all clear that 
this effort by the Progressists was directed solely at the 
foreign policy, although it took this form. In some of 
its aspects it appeared really to be a general attack upon 
the Saionji ministry aimed at a vulnerable point. In sup- 
porting the ministry the Government organs pleaded, with 



JAPAN'S FOREIGN RELATIONS 47 

much consistency, that the matter was inopportunely 
raised, that its agitation would embarrass the administra- 
tion and impair the national prestige. The ministry 
somewhat plaintively protested that it was unfair to direct 
an opposition attack at the foreign policy when it is in 
so critical a situation, and when the Governipent is 
straining every resource to keep the lid on in Korea and 
Manchuria. Many persons in Japan attributed this 
attack to the influence of Viscount Aoki, formerly Jap- 
anese ambassador at Washington, who is known to have 
been at issue with HayashI concerning Japan's relations 
with America. On the other hand, supporters of 
HayashI contend that It was because of Aoki's failure 
to follow Instructions that the American situation got 
away from Japan, and ran amuck among her other 
foreign relations. 

But raising this matter at such a time emphasized the 
patent fact that, on the whole, some one has made a mess 
of the foreign relations of the Empire. In no other coun- 
try, probably, is the practical effect of Japan's loss of 
prestige In the West so fully realized and appreciated as 
in Japan, where its results already are deeply felt. It 
seems that Japan's attempt to diplomatically isolate the 
United States In respect to the Far Eastern Question has 
resulted in comparative Isolation of herself. And in re- 
spect to western sympathy, Japan may In time hatch an- 
other egg, but she never again can patch together the pieces 
of the one which she has broken, and which voluntarily 
was thrown Into her lap by a West for the mom.ent 
filled almost to bursting with a sentimentally warped con- 
ception of Nippon and her Ideals. That former senti- 
mental enthusiasm Is now to some extent replaced by 
suspicion and distrust cannot be doubted; Indeed, this Is 
literally admitted by the more discerning Japanese 



48 THE FAR EASTERN QUESTION 

press. Instead of being able to pose as preserver of 
peace in the East, Japan is regarded by many as the 
most seriously disturbing factor; and if a disillusioned 
and disgusted West, resenting her deception of it, should 
come to consider her an international menace and take 
diplomatic action to restrain her it will surprise none who 
is thoroughly conversant with conditions in the East. 



CHAPTER V 

AMERICA AND JAPAN 

Japan's Modern Attitude Toward America — Attempted 
Isolation of America in the East — Diplomatic Moves 
BY Japan — The San Francisco School Incident — The 
Immigration Question — Weak Attitude of the Wash- 
ington Government — Ignorance of Conditions — Change 
of Heart at Washington — Ambassador Wright's Diffi- 
culties — Turn in the Situation — Transfer of the 
American Fleet — Some Results of This Move — Elimina- 
tion of Trivial Matters — Revelation of the Real Issue 
— Disadvantages of Obscurity in Diplomatic Matters — 
America's Superior Position — Alteration of Balance of 
Power — The Old Japanese-American Entente Finished. 

With the passing of some comparatively trivial mat- 
ters which have disturbed the relations of Japan and the 
United States, the real issue between the two nations 
begins to emerge from the obscurity where for a time 
oblique diplomacy managed to keep it. 

The California school incident tacitly was dropped by 
mutual consent; and the Immigration question, while It 
contains perennial elements of friction, seems to have ar- 
rived at a point where tactful handling can accomplish 
an outwardly satisfactory settlement. This is fortunate; 
for it marks a turning point In the Far Eastern Question, 
and may, by causing clearer understanding of the situa- 
tion, open a way for pacific adjustment of the vast inter- 
ests at stake. 

To grasp this situation as It now exists and as It prem- 

49 



50 THE FAR EASTERN QUESTION 

ises for the future requires examination of the origin and 
development of Japan's modern attitude toward America, 
as it has been expressed through her diplomacy during 
the last two or more years; and glancing in retrospect at 
the series of episodes which mark the disintegration of 
an entente which had endured for half a century, it seems 
to fall into two phases. By the terms of the treaty of 
peace between Japan and Russia ^ a period of some eight- 
een months was ascribed for completion by these two 
powers of the military evacuation of Manchuria, and the 
restoration of those provinces to the administration of 
China. Thus an interval was established, a period of 
transition, during which interested powers were disposed to 
recognize the existence of extraordinary conditions, and 
to suspend active prosecution of their own interests. The 
same condition existed in Korea, although there Japan's 
suzerainty was established by agreement with Russia, 
and the tacit assent of other nations. 

The time limit for final evacuation of Manchuria ex- 
pired in March, 1907; and having then no intention vol- 
untarily to relax her grip upon the country and the ma- 
terial advantages which it brought, Japan recognized the 
necessity of creating a situation whereby she would not 
be disturbed. England already was disposed of, having 
thrown her Interest in Manchuria and Korea into the bal- 
ance of the Anglo-Japanese alliance. Russia, with two- 
thirds of Manchuria and the greater part of Mongolia 
In her possession, possibly could be compromised with by 
a mutual agreement with Japan to each hold what they 
had under cover of military occupation. France, with a 
well-defined " sphere " In the south, and Germany, with 
a slice in the central north of China, also might be bar- 

1 Appendix A. 



AMERICA AND JAPAN 51 

gained with. England tentatively long ago had cast her 
mantle over the Yiang-tse valley. 

One great power remained, whose present trade in 
China and Korea is greater than that of any nation except 
England, and whose prospects are even more promising; 
and which will be more injured by closing the " open 
door " in Manchuria than all other nations combined, be- 
cause a large proportion of her trade lies In the north. 
This nation, also, has no " sphere of influence " in China, 
and will be entirely frozen out politically if dismember- I 4^ 
ment comes. Such is the position of the United States, and 1 
in America Japan recognized the chief obstacle in the way 
of the project to retain her hold In Manchuria, and If pos- 
sible to dominate a considerable part of China. 

In creating a diplomatic cycle which might, if It be- 
comes crystallized into an international entente, practically 
leave her with a free hand In Korea and Manchuria, 
Japan had astonishing success up to a point. In time 
she signed agreements ^ with France and Russia which, 
under cover of the usual assurances concerning the " open 
door," guarantees to each substantial freedom within their 
respective spheres. But the United States remained to 
be reckoned with. There was slight Indication that the 
administration at Washington was then awake to the 
actual situation; still less that It contemplated any action 
to stay the progress of Japan's policy, and actively inter- 
vene to preserve China. But Japan knew that the closure 
of Manchuria and Korea was crippling American trade 
In those regions, that complaints about this condition were 
constantly reaching the Washington Government, and that 
some action in the matter sooner or later must be taken. 
So Japan cast about for an issue upon which to base a dlp- 

^ Appendix B. and G. 



52 THE FAR EASTERN QUESTION 

lomatic complaint to America, for the purpose of distract- 
ing attention from her policy on the mainland of Asia, and 
creating a prehminary diplomatic offset to anticipated pro- 
tests from Washington. 

The time for making this diplomatic flank movement 
apparently was chosen opportunely. Negotiation of the 
French and Russian agreements was progressing favor- 
ably, and it was desirable that they should attract little 
international notice before being promulgated. Com- 
plaints about Japan's policy in Korea and Manchuria 
were beginning to be heard, but public opinion of 
the world which, by giving attention to such representa- 
tions, might have exerted moral pressure upon Japan, 
still slumbered in the misconception of her which military 
and naval success and a flood of indiscrimlnating praise 
had engendered. In casting about for an issue with the 
United States sufficiently sensational to attract widespread 
attention, Japan hit upon a condition which had existed 
for years; the situation of Japanese in the public schools 
of San Francisco. Upon an opportunity presenting, this 
matter was advanced in a way to give it publicity through- 
out the world. In its earlier stages, the incident was 
handled with great skill by Japan, and with, by contrast, 
corresponding inaptitude by the United States. It must 
now be clear even to commonplace intelligence that the 
Washington Government was, in the beginning, somewhat 
at sea in regard to this school question, and the collateral 
issues which were, as the incident progressed, tagged on 
to it by Japan. Had there existed at Washington, at the 
time when japan tentatively sprung this matter upon our 
Government, more than an elementary conception of 
broader issues involved in the relations of the United 
States and Japan, and the conditions which directly and 
indirectly circumscribe and modify these relations, it 



AMERICA AND JAPAN 53 

would, perhaps, have been possible to avoid the sensa- 
tional course which was followed, and to have accom- 
plished the diplomatic shift by less disturbing methods. 
But this knowledge apparently did not then exist, and the 
Washington administration stumbled along until partial 
comprehension of the situation was hammered into it by 
the progress of events. 

Intelligent Americans must by now, in recalling certain 
events of 1906—7, feel chagrined at the way our Govern- 
ment handled the early stages of the school and immigra- 
tion incidents. That it, at a suggestion from Japan, 
was at first disposed to abdicate in the school incident a 
power to regulate its internal affairs which is a funda- 
mental attribute of any government, and which it had 
specifically reserved by treaty, is now clear. The dip- 
lomatic phase of the incident has vanished — one hardly 
knows when or where; while the practical issue in- 
volved has quietly pursued Its course In the courts, where 
It would have gone at first had not Japanese diplomacy 
found passing use for it. In respect to the question of 
Japanese Immigration to the United States, Washington, 
after months of semi-apologetic bowing and scraping, ac- 
companied by Intimated threats to coerce the state of 
California, discovered that not only does Its treaty with 
Japan specifically give our nation the right to exclude cer- 
tain classes of Japanese, but that Japan long ago exer- 
cised her corresponding right by promulgating an Imperial 
Ordinance ^ excluding some classes of foreigners, which 
legally applies to Americans. What wonder that Japan, 
perhaps herself astounded at the way American states- 
men " rose " to her fly, should have ventured to press her 
advantage until it became a boomerang? 

The exact cause of the change of heart at Washington 

1 Appendix L. 



54 THE FAR EASTERN QUESTION 

is not clear, but early in 1907 the administration seems to 
have apprehended that there was more in Japan's diplo- 
matic maneuvering than appeared on its surface. This 
discovery caused a sudden reversal in the attitude of the 
United States. Among other moves to regain lost ground, 
and restore a parity in the diplomatic relations of the two 
governments, an American fleet was ordered to proceed to 
the Pacific Ocean. It is profitless to review the tactless 
method by which this necessary transition was accom- 
plished. The acceptance by Japan and the world of the 
fact that the fleet actually was to be moved, and its suc- 
cessful voyage, entirely changed the situation, and marked 
the turning into the second phase of the negotiations. 

Several correlative incidents attended the development 
of this phase. Among them was the double shift in dip- 
lomatic representation at Tokyo and Washington. Con- 
siderable interest is attached to these transfers. General 
Luke Wright, the last previous American Ambassador 
to Japan, voluntarily resigned his post. He gave as 
his reason the necessity to attend to private affairs at 
home; but it is believed by well informed persons in Japan 
that this was a secondary consideration, and that the real 
reason General Wright quit Tokyo was because he was 
disgusted with the weak-kneed and vacillating course of 
our Government, and with the shiftiness and veiled im- 
pertinence of the Japanese Foreign Office. Indeed, Gen- 
eral Wright was called upon to act as a diplomatic buffer 
while Washington was pulling its wits together and pre- 
paring to strengthen her diplomacy by giving it some 
practical support in the Pacific, and the job was not an 
agreeable one. For months General Wright had to stand 
the polite bully-ragging of the Japanese foreign oflice, and 
patiently to endure the sarcastic comment of the Japanese 
press upon American political Institutions. The discov- 



AMERICA AND JAPAN SS 

ery of the forgotten Imperial Ordinance brought a change, 
and made General Wright's way smoother; but he insisted 
upon acceptance of his resignation and retired. 

In this connection it is interesting to note the part 
which has been played by the Imperial Ordinance in 
question. Although promulgated in 1899, it apparently 
escaped the notice of the American minister at Tokyo 
and of the State Department, for no record of its exist- 
ence was on file at either place. It was called to the at- 
tention of General Wright by an American resident of 
Yokohama, who hit upon it in the course of legal business 
and made an investigation of its scope and operation. 
When General Wright produced it at the Tokyo foreign 
office it caused consternation, and swept away the founda- 
tions of Japan's position by demonstrating that she then 
was exercising powers exactly parallel in practice and 
principle to actions of the United States to which she was 
objecting. Indeed, just at that time several hundred Chi- 
nese were arbitrarily deported from Nagasaki. The 
Chinese minister at Tokyo protested, pointing out that 
such action is contrary to the spirit of the treaty be- 
tween Japan and China. The Japanese Government took 
refuge behind the clause of the Imperial Ordinance which 
gives to local governors power to exercise discretion 
in such matters, and said that it could not interfere. And 
this occurred at a time when the Japanese press was in- 
sisting that the Washington Government coerce California 
by compelling conformation to alleged treaty rights which 
did not exist. 

Whatever may be the considerations which led General 
Wright to retire, he prepared the way for his successor 
by clearing It of petty and Irritating issues. The arrival 
of Ambassador Thomas J. O'Brien in Japan was coinci- 
dent with the visit of Secretary Taft, whose vigorous 



56 THE FAR EASTERN QUESTION 

speech at Tokyo in September, 1908, helped to clear the 
air of cobwebs. So Mr. O'Brien was able to take up his 
duties on a fresh basis, and with the support of a Govern- 
ment which at last knew with some definiteness where it 
stood and how far it was prepared to go in asserting its po- 
sition. On the other hand, Japan's attitude also had 
changed. She knew by this time that her little " bluff " 
had been called, and that if she was to save a remnant 
of American good will out of the wreck which she had 
made of the former entente cordiale she must substitute 
candid deahng for diplomatic evasions. In taking up the 
immigration question with the Tokyo foreign office, Mr. 
O'Brien's first task was to make it understand that the 
United States is In earnest, and that If Japan does 
not undertake the regulation of her emigrants to Amer- 
ican possessions the United States will. I understand 
that the Japanese cabinet was slow, or at least reluctant 
to accept this condition as an actuality which must be met 
by practical administrative process. The foreign office at 
first rephed to Mr. O'Brien's definite proposals that If 
the United States insisted upon Japan taking action, Japan 
must decline to yield to such external pressure; but If 
the proposals were advanced in a spirit of friendly sug- 
gestion, Japan would be glad to discuss the matter. 
These little preliminaries by way of " saving face " being 
in time got out of the way, the negotiations reached a prac- 
tical stage, and now seem in a fair way to be peacefully 
If not satisfactorily adjusted. A somewhat curious fea- 
ture of the progress of these negotiations is that the 
chief difficulty which Japan professed to find in acceding 
to the American proposals, or at least It was so advanced 
by her. Is that Japanese emigration law assigns to local 
governors the authority to Issue passports, and Japan 
claims that the central Government cannot easily control 



AMERICA AND JAPAN 57 

the actions of these governors, thus taking refuge behind 
what really is a " state rights " theory. Although having 
previously given assurances to the contrary, it was only 
within the last months of 1908 that the Japanese Govern- 
ment actually began to restrict the issue of passports to 
emigrants and to regulate the emigration companies. It 
seems, however, to have accepted the inevitable, and there 
is reason to think that the Government is now carrying 
out restriction in good faith as to intent, if with imper- 
fection of method. There Is still some quibbling on 
points, but if final agreement is long delayed it will be 
because Japan thinks it desirable to for a time hold this 
issue in hand as a possible offset for other matters. 

For In the course of the shujffling of diplomatic odds 
and ends which accompanied discussion of the so-called 
American-Japanese situation, the real bone of contention 
was exposed. This Is that perennial storm center of the 
East, Manchuria; or to convert It Into a political expres- 
sion, it is the "open door" In eastern Asia; or in other 
words, it is the existence or disintegration of the Chinese 
Empire, and all that Is included therein. 

That this Is recognized in Japan Is shown by the fact 
that Japanese journals both native and foreign, including 
the important segment of the press controlled by the Gov- 
ernment, have thrown off the mask and openly dis- 
cuss possibilities of the injection of Manchuria into 
the relations of Japan and America. The strictly Gov- 
ernment organs, which daily voice the viewpoint which for 
the moment It wishes to give publicity, usually adopt a 
depreciatory tone, and have printed articles calculated to 
demonstrate that the interests of Japan and America In 
Manchuria and China are not antagonistic. But the at- 
tempt to conceal the fact that Japan's policy In Asia Is the 
real Issue between the governments already Is substantially; 



58 THE FAR EASTERN QUESTION 

abandoned, as a diplomatic pose which has lost power to 
beguile. 

There are indications also that the press of America 
and Europe, or at least a portion of it, is beginning to 
perceive the truth. One can understand, however, that 
the truth about the Far Eastern situation, in so far as it 
applies to America and Japan, will be reluctantly accepted 
by many Americans, and regarded by them as likely to 
inject a fresh cause for dissension into relations on the 
point of being fully restored. In my opinion, this is a 
short-sighted and erroneous view. Intelligent persons in 
America to whom the sudden disruption of our friendly 
relations with Japan came as a thunderbolt out of a clear 
sky have, very naturally, found it difficult to understand 
the persistence. In affording a basis for predicting a hostile 
collision between Japan and the United States, of such 
manifestly inadequate matters as have until recently been 
the outward questions involved. Of what avail has It 
been for public men and the more respectable portion of 
the press to reiterate, with evident truth, that the school 
and immigration questions are comparatively minor mat- 
ters, and susceptible of adjustment. The failure of such 
explanations to develop an understanding which long ago 
would have restored cordial relations between the two 
nations lies In the fact that they have left out of consid- 
eration the real Issues. Properly regarded. It seems to 
me that a discovery to the public opinion of the world of 
the seat of the trouble should contribute to peaceful ad- 
justment by revealing the cause of the disorder. At any 
rate, it may now definitely be seen that during the pro- 
longed period of diplomatic tom-tom beating about false 
issues the factors which conceivably may lead to a colli- 
sion between Japan and America were rapidly developing, 
and gathering strength. 



AMERICA AND JAPAN 59 

Therefore when the elements involved are considered 
in correct perspective, it becomes evident that what may 
be called the genuine Japanese-American situation is now 
entering upon its initial diplomatic stage, in so far as the 
direct relations between these two governments are con- 
cerned. And although Japan anticipated this condition, 
by concluding a series of agreements with other powers 
designed effectively to isolate America in the international 
comity which holds the balance of power, it is equally 
clear that the United States occupies to-day, in comparison 
with Japan, a position of advantage. In both of the de- 
termining elements of strength — moral and material — 
America overtops Japan. In the first place, when the 
actual conditions which must provide a basis for interna- 
tional action in the matter are extricated from the haze 
of misconception which now obscures them it will be 
found that America is in the right should she, primarily 
prompted by the need of safeguarding her own great 
interests, intercede to succor China. In regard to the ma- 
terial element — naval and military strength, and the 
resources necessary to successfully wage a prolonged war 
— the United States again is greatly superior, whatever 
may be asserted to the contrary by persons who study 
results of the Russo-Japanese war with a false sense 
of proportion. The further fact that the ultimate issue 
of any war between America and Japan will be whether 
the ideals and genius of the white or yellow races will 
dominate the future of civilization practically assures to 
America the moral support of greater European powers 
should such a conflict ever come. 

That the United States now finds Itself In this superior 
position is due, however, to circumstances rather than to 
good management. There now can be little doubt that 
when Japan made her diplomatic " bluff " the Wash- 



6o THE FAR EASTERN QUESTION 

ington administration did not know the value of the cards 
it held, or the stake of the game; and that it did not 
come an international cropper is because Fate, which has 
a way of looking after her favorites, has placed all the 
high trumps in America's hands. 

It is apparent that Japanese statesmen believe that 
the American fleet's visit to the Pacific marks the begin- 
ning of a new era in Asiatic affairs. They would greatly 
have preferred for the whole American navy to stay In 
the Atlantic, but they knew that they provoked the change 
in policy, and now accept the new condition with the best 
grace possible. They realize that when the American 
fleet rounded the Horn it completely altered the balance 
of power in the East, which probably never will resume 
Its former state. Fears of its being intercepted by a 
Japanese fleet, were, of course, chimerical. I have reliable 
Information that when the American fleet sailed on its 
long voyage the Japanese Government had only three bat- 
tleships In commission; the others were undergoing repairs 
and reconstruction at the time. So nothing could then 
have been further from Japan's mind than a hostile ex- 
cursion against our fleet, because, even If the Inclination 
had existed, such a move was entirely beyond her power. 

It Is, I think, an error to assume that elimination of 
the school and Immigration questions will mean complete 
restoration of the former Japanese-American entente. 
This never can be restored in the shape which it previously 
assumed. Conditions never will revert to the situation 
which gave It vitality. It is perhaps not going too far 
to say that relations of America and Japan are only 
now becoming serious. In the sense that they directly In- 
clude propositions about which modern nations will, upon 
due provocation, go to war. Japan may, I think, be 
justly acquitted of the charge of having, at present, ul- 



AMERICA AND JAPAN 6i 

terior designs upon the Philippines. That Japanese 
statesmen would regard those islands as a desirable addi- 
tion to the Empire hardly may be doubted; but the time 
is not propitious to advance such a project. The genesis 
of a collision between Japan and the United States of 
America, if it ever occurs, will be found in conditions on 
the mainland of Asia. 



CHAPTER VI 

JAPAN'S MILITARY AND NAVAL 
PROGRAMME 

Efforts at Secrecy — Revelations of the Budget — 
Some Comparisons of Expenditure — Debate in the Diet — 
Foreign Attention Attracted — Discontent of the Con- 
servative Element in Japan — Explanations and Argu- 
ments OF THE Government — General Terauchi's Utter- 
ances — Popular Propaganda for Military and Naval Ex- 
pansion — Creation of War Fund — International In- 
terest IN the Matter — Object of the Military Policy 
— Directed Against China — Relation of the United 
States to the Question — Unreliability of Diplomatic 
Pronouncements. 

In the attempt by Japan to repair the bi-cach which, as 
she now reahzes, her commercial aggressiveness and the 
quasi-rupture with America made in her international 
polity, considerable prominence is given to alleged in- 
tention on her part materially to reduce military and 
naval expenditure ; and there are indications that the state- 
ment is taken seriously in some quarters and has a ten- 
dency to allay uneasiness. The method of conveying 
this matter to the world intimated that it was given 
publicity for political effect, as an offset to discussion 
of a belligerent tone, which meant that it probably would 
not, without examination, be literally taken as true. But 
the topic is important, and a study of factors which apply 
to it reveals some interesting and perhaps illuminating 
facts. 

62 



JAPAN'S MILITARY PROGRAMME 63 

It is not always easy quickly to apply the test of con- 
temporaneous official action to such passing diplomatic 
stop-gaps ; but it chanced that this one was advanced con- 
temporaneously with the proposal to the Diet of the an- 
nual budget of 1907-8, which brought to a focus a min- 
isterial crisis and induced a flood of light upon the matter 
in question. The issues which contributed to this crisis 
are various and complex, and involve all the major ac- 
tivities of Japan's present regime. However, it for the 
moment took the shape of a struggle between the military 
faction which has for several years controlled the Gov- 
ernment and its opponents. This had the effect of to 
some extent concentrating attention upon the military and 
naval programme and, by interpolations of the opposi- 
tion in the Diet, compelling the Government to show its 
hand. 

The debate which ensued turned upon a proposal by 
the ministry to increase taxation, which led to scrutiny 
of the budget with a view to possible economies. The 
financial and economic situation of Japan deserves special 
consideration and cannot well be elucidated here; but the 
fact that the nation is in financial difficulties and that the 
people are struggling under oppressive taxation may be 
now mentioned as having a direct bearing. In fifteen 
years the annual budget has grown from Yen ^ 113,769,- 
380.00 to Yen 620,000,000.00; and per capita taxation 
has been increased in similar proportion. The war with 
Russia and the consequent policy of the Government in- 
creased the national debt from Yen 552,000,000.00 
to (on March 31, 1908) Yen 2,267,000,000.00, and the 
annual interest charge from Yen 36,000,000.00 to Yen 
166,000,000.00. 

In estimating the probable relation of Japan's expendi- 
1 A Yen is approximately worth fifty cents in United States currency. 



64 THE FAR EASTERN QUESTION 

ture for armaments to her political policy, it is interesting 
to recall some items of her budget during the past few 
years. The assumption that, for several years before 
the beginning of the war against Russia, Japan had been 
actively preparing for that conflict will hardly be disputed 
nowadays. I reproduce some comparative statements of 
military and naval expenses for the year which imme- 
diately preceded the Russo-Japanese war and the present 
year. 

ARMY. 

1903-4 Yen 46,000,000.00 

1907-8 Yen 1 1 1,600,000.00 

NAVY. 

1903-4 Yen 35,800,000.00 

1907-8 Yen 82,000,000.00 

The figures for 1907-8 are those of the ordinary and 
extraordinary budgets combined. It seems probable that 
immediately prior to the war with Russia, Japan juggled 
her published budget to the extent of including military 
and naval expenditures under other items, which Is a de- 
vice frequently resorted to by governments, for the sums 
stated for that fiscal year do not seem to be adequate 
when the conditions are considered. There has been an 
Increase since the war of 132 per cent, in regular an- 
nual expenditure for armaments. The extraordinary 
budget for 1907-8 carried out of a total of Yen 204,000,- 
000.00 some Yen 107,000,000.00 for the army and navy, 
or more than half; thus probably more than equalizing 
any discrepancy which assumed secrecy may have made in 
the expenditures of the years compared. While I have 
not Included In this tabular statement the expenses for In- 
termediate years, it is significant to note that each year has 
shown an increase, culminating with the last fiscal year; 
which demonstrates beyond peradventure that hardly was 



JAPAN'S MILITARY PROGRAMME 65 

peace with Russia concluded when Japan began to apply 
all available part of her revenue to increasing the strength 
and efficiency of her army and navy, until in 1908 the or- 
dinary and extraordinary budgets together show that over 
40 per cent, of the national revenues is devoted to this 
purpose. Since these items of Japan's budget have be- 
gun to attract international attention and to excite criti- 
cism, some statements have been published by that part of 
the foreign press in Japan which is controlled by the Gov- 
ernment that are designed to show that the military and 
naval budgets are less than figures given above, and to 
support this contention some neat juggling of items has 
been done. Indeed, the Japanese method of preparing 
the budget always presents incongruities that make it diffi- 
cult for a foreigner to ascertain the facts exactly; but fig- 
ures I give were compiled by a foreigner long familiar 
with conditions in Japan, and may, I think, be accepted as 
approximately correct. Other military and naval expen- 
ditures which are under way were kept out of this budget 
by the simple expedient of holding them over, as a matter 
of official bookkeeping, until the next year. 

For the year or two before the publication of the 
1907—8 budget the conservative element in Japan had 
been growing more discontented with the policy of the 
Government, and when the budget carrying such appro- 
priations, coupled with the admission of the Government 
that an increase in taxation would be necessary to carry 
out its programme, was brought before the Diet it ex- 
cited determined opposition. It was contended that the 
threatened deficit should be corrected rather by decreas- 
ing the expenditure for armaments than by increasing 
taxation, which put upon the Government the task of 
attempting to demonstrate the need for such armaments- 
Its chief spokesman was General Terauchi, the minister 



66 THE FAR EASTERN QUESTION 

for war; and In course of the many debates which at- 
tended progress of the budget through the Diet, he 
and his pohtical colleagues advanced some interesting ar- 
guments in support of their policy. In a notable speech 
in the Diet General Terauchi sounded the key-note of the 
military party when he declared that " Japan must be 
prepared for all eventualities." The speech bristles with 
striking statements, but one or two quotations will give 
an idea of its trend. " All great countries in the world 
have established their armaments on the basis of their 
geographical and political position," is one expression he 
used; and " The Pacific Is destined to form the scene of 
the next great conflict " is another. In a later speech, 
when the budget as submitted was put for final action by 
the Diet, he argued that the depleted state of the national 
finances should not be considered a reason for reducing 
naval and military preparations, and declared that the 
nation will not hesitate to bear an Increase in taxation " to 
provide for the future development of the EmpireJ' 

If such utterances have a flavor of the jingoism usually 
resorted to in most countries when governments are ask- 
ing appropriations for military and naval purposes and, 
consequently, need not be taken too seriously. It should 
be remembered that Japan Is able to persist in this policy 
only by crowding her finances very close to the edge of a 
precipice, and by resorting to burdensome taxation. When 
a nation is in easy financial circumstances, and with a great 
reserve of untouched taxable wealth to draw upon, pro- 
portionate expenditure for armaments may be accepted as 
representing a general aim to provide for national se- 
curity. But when a nation situated as Japan now Is de- 
votes 40 per cent, of her revenue to armaments, with 
increased estimates for forthcoming years, and when a 
responsible member of the cabinet tells the Diet " that 



JAPAN'S MILITARY PROGRAMME 67 

for a few years to come there may not take place any- 
thing which will radically change the present scheme of 
the War Departm:ent," it reasonably may be presumed 
that the policy has in mind some actual or expected con- 
dition, and is pursued in anticipation of an emergency. 

There are many evidences that a popular propaganda 
in favor of an expanding military and naval policy Is be- 
ing carried on apart from direct governmental activity. 
A prominent Japanese economist, Mr. Kanamori, In an 
address before the students of a college, recently said: 

" History tells us that Japan has had and will have a 
war every tenth year. Every Japanese must therefore be 
prepared against another big war in no distant future 
and, maybe, with a still mightier foe than she encountered 
last. And the most important preparation is a war fund. 
One sen [^ cent] each day from each Jap- 
anese will before ten years amount to more than Yen 
1,000,000,000.00, the sum which the last war cost 
Japan. Hence arises the necessity for saving. If every 
Japanese — babies included — is fully determined In this 
wise, Japan may confidently enter Into foreign warfare, 
and the sad history of Portsmouth will never repeat 
itself." 

To my limited knowledge, both the historic and politi- 
cal bases of this statement seem open to dispute, but the 
gentleman Is so reported by a competent translator, and 
his remarks Illustrate a general argument which Is, In 
various guises, persistently being inserted Into the minds 
of Japanese by Influential elements in the Government 
and their sympathetic segments In all walks of life. 
Viewed one way, such propaganda may be considered 
largely political, and regarded as a method of contenting 



68 THE FAR EASTERN QUESTION 

the people with the policy of the miFitary party; for it is 
no longer possible to conceal the fact that the fiscal diffi- 
culties of the nation chiefly are due to the diversion of so 
great a proportion of its revenues to maintenance of 
the army and navy. How long Japanese taxpayers can 
be induced to assent to this policy is, at present, a very 
doubtful question. Indeed, there are prominent Japanese 
who openly assert that rather than suffer this policy to re- 
act upon its instigators, as it will in the end unless its 
wisdom is practically justified by the course of events, the 
military party will plunge the nation Into another war for 
national aggrandizement. One critic paradoxically has 
described the policy of the military party as having for 
an object the creation of a state of " permanent emer- 
gency." 

Tliere are, perhaps, many Americans who believe that 
the reasons which give vitality to Japan's military and 
naval policy, as one of the striking manifestations of 
forces which now direct the nation, concern the United 
States only in an academic way, and are not to be re- 
garded as ever likely to be directed against us, or to di- 
rectly involve our Government. It is true, I think, that 
this policy Is not at present specifically directed against 
the United States; but I firmly believe that it has the 
United States incidentally, even definitely In mind. One 
hardly can assume a policy promoted under such extraor- 
dinary difficulties, at such a sacrifice of other national 
interests, to be Indefinite or purposeless. These prepa- 
rations cannot be regarded as defensive, for Japan's terri- 
torial integrity Is threatened from no source, and fur- 
thermore is guaranteed by the Anglo- Japanese alliance. 
Against whom, then, are Japan's armaments directed? 

An answer to this question must be sought in the 
conditions which circumscribe and limit Japan's national 




Japanese Schoolboys Being Instructed in Military Dri 




Japanese Schoolboys Practicing Breaking Through Wire Entan- 
glements TO Carry Entrenchments. 



JAPAN'S MILITARY PROGRAMME 69 

ambitions and, omitting for the time a detailed account of 
matters which apply to the proposition and unmistakably 
indicate its course, it Is clear that these preparations are 
directed against China. And since the fate of China 
involves the interests of other nations, perhaps may af- 
fect the future of civihzation, Japan's preparations nec- 
essarily must Include consideration of those other nations 
and their interests. Here then, and here alone, do the 
national perimeters of Japan and the United States ad- 
versely intersect. Japan has appreciated this for years, 
and shaped her foreign and domestic policies in recogni- 
tion of it. America seems at last to be waking to per- 
ception of what the Eastern Question means to her. 

Passing for the moment Inquiry Into the clash between 
Japanese and American interests In eastern Asia, this dis- 
cussion now may be confined to attempting to determine 
Japan's attitude toward China. As time passes there is 
less reserve among Japanese of all classes, including 
the official and unofficial press, In discussing the Gov- 
ernment's policy on the continent, especially In Man- 
churia. Japanese prominent In the educational and com- 
mercial world frankly have expressed opinion that Japan 
requires continental possessions, In addition to Korea, to 
develop her national growth. Usually the phraseology 
of these expressions is guarded, but their meaning is clear 
enough. Thus the Hochi, which represents the views of 
Count Okuma and his party, recently said : 

" It Is a foregone conclusion that China will In future 
be the scene of international trouble. ... In deal- 
ing with China, some advocate partition, while others in- 
sist upon the maintenance of her Integrity. ... It 
Is therefore desirable that Japan should, as a neighbor, un- 
dertake the task of guiding China to the same status as 



70 THE FAR EASTERN QUESTION 

is now occupied by herself. . . . The Government 
should be wide awake, and adopt a strong and far-sighted 
policy in dealing with Chinese affairs." 

Other leading native newspapers comment along sim- 
ilar, even more definite lines, although all avoid state- 
ments which might excite international attention by being 
too specific. Other sections of the press take a bolder 
tone. For instance, I recently found this in a newspaper 
which was a short time ago assuring the western world 
that Japan's promises regarding Korea and Manchuria 
are to be relied upon implicitly in an article which dis- 
cusses at length the alleged conflict of American and 
Japanese interests in Manchuria : 

" It is difficult to understand the frame of mind which 
at any time believed that Japan's action with regard to 
Manchuria was actuated by altruistic motives. Nations 
do not so act, and Japan is in this respect no worse than 
others. Had she been genuinely concerned for the res- 
toration to China of her full sovereign rights, Port 
Arthur would now be a Chinese fortress and the South 
Manchurian Railway a Chinese line. What happened 
was that Japan simply took the place of Russia. 
Both Japan and Russia made declarations about the ' open 
door ' to all nationalities which were doubtless equally 
sincere, but in both cases, etc. . . ." 

It is indeed difficult to understand the frame of mind 
which believed that Japan was actuated by altruistic mo- 
tives in ejecting Russia from southern Manchuria, but 
for a long time a considerable part of the western press 
seems to have been obsessed with the idea, and it still per- 
sists in some quarters. The description of the declara- 



JAPAN'S MILITARY PROGRAMME 71 

tions of Japan and Russia about the " open door " as be- 
ing " equally sincere " is peculiarly apt. 

However, there are few outward evidences of an in- 
tention by Japan to provoke presently a rupture with 
China. On the contrary, it apparently will best serve 
her end to delay yet awhile before permitting her con- 
tinental policy to take more positive shape. While she 
probably could at present overwhelm China in war, she 
realizes that China might be able to summon assistance, 
and Japan must be prepared for this contingency. 

In regard to the relation of the United States to the 
question of Japan's unusual military and naval prepara- 
tions, one hopes that those in authority at Washington 
will not fall into the error of placing too much emphasis 
upon the recent rapproachment of the governments, as 
removing all cause for friction between the two nations. 
Upon the occasion of Baron Takahlra's arrival In Amer- 
ica, in February, 1908, to replace Viscount Aokl as Jap- 
anese Ambassador, he repeated to the press the usual 
formula. Among other things, he was reported as say- 
ing: 

" For the United States and Japan to go to war would 
be a crime against civilization. Certainly nothing could 
be further from Japan's thoughts than war. Her atten- 
tion is devoted to the development of the material re- 
sources of the nation, and the upHfting and enlightenment 
of her people." 

I was in Japan when this utterance was made, and I 
could mentally picture the chorus of comment in which 
this inane utterance was described as " setting at rest " all 
talk of a possible embroilment of the two nations; indeed, 
It was not necessary to work one's imagination, for the 



72 THE FAR EASTERN QUESTION 

press of Japan shouted In full chorus. As nearly as I 
can conclude, at about the same time when Mr. Taka- 
hira was delivering this statement, the Japanese Diet was 
passing, over protests of commercial and industrial 
bodies, a budget which included the following Items : 

Army and Navy (exclusive of special expenses 

held over) Yen 193,000,000 

Education (exclusive of Prefectural funds) . . . 8,236,940 

There are Important factors which may, which prob- 
ably will operate to check the military policy of Japan; 
but a comparison of Baron Takahira's statement with the 
foregoing items of the Japanese budget seems to justify 
the world in regarding Japan and her policy through other 
light than that provided by conventional diplomatic as- 
surances. 



CHAPTER VII 

JAPAN'S MILITARY AND NAVAL STRENGTH 

Japan's Immunity from Invasion — Not the Object of 
Hostile Ambitions — Her External Belligerency Esti- 
mated BY Comparisons — Some Fallacies About Mili- 
tant Japan — Her Army and Navy Scrutinized — Con- 
ditions OF Military Service — Composition of the Army — 
Term of Service — Japanese Officers — Passing of War 
Conditions — Exaggerated Statements — Equipment of 
THE Army — Mistaken Conceptions — The Japanese 
Navy — Personnel and Equipment — Its Present Condi- 
tion — Significance of Japan's Preparations. 

The military and naval strength of Japan possesses 
interest to the world more through its possible relation 
to the solution of the eastern problem than as a defensive 
factor; for the most imaginative of those writers who are 
fond of predicting international collisions have yet to con- 
ceive a successful invasion of Japan by a foreign foe. 
This not only is impractical as long as Japan maintains 
a moderately large and efficient army and navy, but no 
nation is now suspected of designing a conquest of Nip- 
pon; nor is there any probability that any ever will aspire 
to such a difficult and profitless undertaking. It is, there- 
fore, only force that Japan may be able to apply ex- 
ternally that need concern other nations. Such matters 
usually are judged by comparison, and the course of re- 
cent events has induced comparisons between the bellig- 
erent power of Japan and the United States. In this 
discussion it is assumed by many that should a hostile 

73 



74 THE FAR EASTERN QUESTION 

collision between these two nations occur in the near 
future, Japan will have advantage over America, owing 
to her presumed military and naval efficiency and pre- 
paredness, and that her comparative superiority in these 
things will offset our advantages in other matters. 

This view has been widely disseminated, generally by 
persons who somewhat vaguely base their conclusions upon 
certain results of the war between Japan and Russia; but 
often, also, by commentators of accepted standing in rela- 
tion to military and naval affairs, whose opinions carry 
some weight. While there is perhaps little reason to 
fear detrimental effects upon American interests and 
prestige through acceptance of such views, probability 
that the so-called Japanese question is destined to take a 
permanent place in our Government's policy may warrant 
a presentation of some phases of this proposition which 
so far have received small public attention. 

A consideration of the present condition of the Japanese 
army and navy, compared with those of other nations, 
involves the usual elements — personnel and equipment. 
It Is probable that in any collision between Japan and the 
United States the navies of the two nations will be the 
decisive factors ; but an army more nearly touches the con- 
ditions of national existence than does a navy, or at least 
rests upon a somewhat broader base, so I will discuss the 
status of the Japanese army first. 

All armies are divided Into two general grades, the rank 
and file, or the officers and enlisted men; and these grades 
usually are recruited under widely varying circumstances. 
In countries which pretend to modern efficiency officers 
must undergo some process of selection, and commissions 
are granted only to men who have studied in military 
schools or who pass prescribed examinations. Of course, 
there are exceptions to this In all countries, but the con- 



JAPAN'S MILITARY STRENGTH 75 

dition may be accepted as sufficiently general to estab- 
lish the rule. Officers Have no regular term of service, 
and are expected to retain their commissions during 
good behavior, and as long as they are physically capable 
of attending to their duties. There is, nevertheless, a 
constant loss of officers from various causes which amounts 
in most armies in time of peace to about 20 per cent, in 
comparison with the period covered by the enlistment term 
of the file of the army. Losses in war should be consid- 
ered separately. 

The regular term of service for enlisted men in most 
modern armies to-day is three years, although the French 
and Japanese governments already have reduced it to two 
years, and it is announced that Germany will make a similar 
reduction. This means that the entire enlisted personnel of 
an army will be renewed every two or three years, as may 
be, less the number of re-enlistments. Some armies also 
have a five-year enlistment, (like the United States Army,) 
carrying with it special inducements, and some governments 
which do not employ the conscript system offer bonuses 
to secure re-enlistments, and thus keep experienced men 
in the service. The fact that the United States Govern- 
ment gives liberal bonuses, together with the generally 
better situation of enlisted men in its service, makes re- 
enlistments in our army and navy larger in proportion to 
those of other nations. 

The Japanese army is officered by men recruited In 
the usual way. A majority of the younger officers have 
studied in the military schools of Japan, but many were 
appointed from civil life upon passing an examination. 
The conditions under which young men In Japan enter 
the army as officers do not differ materially, when ex- 
amined, from the method employed for recruiting officers 
in England and the United States, nor are results sensibly 



^6 THE FAR EASTERN QUESTION 

different on the average, which means that a fairly ca- 
pable lot of men are secured. Imminence of war stim- 
ulates enlistment in most countries, and before the war 
with Russia there was a rush of the best intelligence and 
blood in Japan to get commissions in the army and navy, 
which were freely granted, as it was necessary to augment 
the official personnel. 

This movement began perhaps a year before hostilities 
against Russia started, and culminated in 1903-4, 
four or five years ago. The war was fought, with great 
attendant loss of officers; and the official personnel has 
been further reduced by retirement and resignation of 
thousands of officers who tendered their services for the 
war, and for whom no place can be found in the regular 
organization on a peace basis. Without further details, 
an estimate indicates that probably not more than half 
the officers of the present regular Japanese army were in 
the service when war with Russia was commenced, the 
remainder being men who entered the service during and 
since the war. 

In respect to the file of the army, somewhat different 
conditions apply. It is now known that for at least two 
years before the Russo-Japanese war the Japanese Gov- 
ernment gave bounties for soldiers and sailors who re- 
enlisted, so as to begin war with as many experienced 
men as possible. But these bonuses now are discontinued, 
and it may safely be assumed (such information as is ob- 
tainable bears out this view) that the enlisted person- 
nel of the Japanese army to-day is composed of new 
recruits and rather less than the ordinary proportion of 
re-enlistments. The Japanese enlistment method is 
founded, as are most of their military regulations, upon 
that employed by Germany, and is based upon universal 
conscription. Owing to lapse of time, only those men 



JAPAN'S MILITARY STRENGTH 77 

who enlisted at the very end of the war, and perhaps 
never saw active service, are still in the ranks. Experi- 
ence has shown that after a long and severe war there is a 
disposition among even that segment of army personnel, 
usually called " regulars " because they have got into the 
rut, to get out and enjoy personal liberty at least for a 
while,- and there is no reason to believe that this rule does 
not apply to Japanese as well as to other races. With 
these precedents and conditions for a basis, it is doubtful 
if the proportion of enlisted men in the Japanese army 
to-day who have seen service is more than 10 per cent, and 
within two years even these probably will have returned 
into the body politic. 

A statement recently was published, having as alleged 
sponsor a retired naval officer of the United States, that 
Japan could immediately put 1,000,000 veteran troops 
in the field. It is difficult to understand why a military 
man would make such a statement. The present Jap- 
anese regular army approximates 120,000 officers and men 
under arms, and any increase must be by methods similar 
to our own under such circumstances. It is true that 
there are organizations designated as first and second 
reserves, but these " reserves " exist only on paper, and 
are organized only in the sense that certain classes 
are designated as belonging to them, and are lia- 
ble to be called upon for active duty without previous 
notice or consent. All European nations have similar 
reserves. The necessity for fiscal economy, if no other 
reasons existed, required Japan to reduce the personnel 
of her army and navy to normal as soon after hostilities 
ended as was possible, aside from the fact that a majority 
of soldiers had been conscripted only for the war. 

Turning from personnel to equipment, let us consider 
that of the Japanese army to-day. The rifle with which 



78 THE FAR EASTERN QUESTION 

the troops were armed during the war is known as the 
Arisaki rifle, named after a Japanese officer of ordnance; 
and is almost a replica of the Mauser 1893 model, for- 
merly used by the German army. The Japanese Gov- 
ernment, following its customary course in such matters, 
simply appropriated the mechanism of the Mauser, with 
a few modifications, such as a shorter stock adapted to 
the short arms of Japanese soldiers, and a shorter barrel. 
As a weapon, the rifle was not improved by these changes, 
although lightened a little, for the calTbre was decreased 
to give velocity and a flatter trajectory, which, as ex- 
perience demonstrated, perceptibly diminished the " stop- 
ping power " of the ammunition. While about equal to 
the rifle used by the Russian army (the 1891 Mann- 
licher) the Arisaki rifle is inferior to rifles with which the 
United States, German, French, and British armies are 
now supplied. This is fully recognized by Japanese ord- 
nance officers, and plans to re-arm the army entirely now 
occupy the attention of the general staff. The stub bayo- 
net with which the Arisaki rifle is provided is now be- 
lieved to be inadequate, and a number of minor deficien- 
cies were demonstrated during the war. 

But if the fact that the old model Arisaki rifle Is obso- 
lete, (judged by modern standards it is not as good a 
weapon as the Krag, recently discarded by our Govern- 
ment,) did not supply a sufficient reason for providing 
the Japanese army with a new weapon, one exists through 
the wearing out of the rifles used in the war. The number 
of Arisaki rifles In Japanese arsenals when the war began 
is not definitely known, except to the Japanese staff, but 
it was noticed that even early In the war rifles captured' 
from the Russians were used to arm supernumeraries 
which were attached to the Japanese armies, and foreign 
military attaches noted that late in the war some Japanese 



JAPAN'S MILITARY STRENGTH 79 

soldiers carried Russian rifles; which indicates that the 
supply of Arisaki rifles was limited, since any military 
man knows the objections to introducing into an army 
arms requiring different ammunition. The erosion of 
small calibre rifles using smokeless powder is very great 
compared to former methods, and tests have demon- 
strated that rifles rapidly deteriorate after having been 
fired one thousand times, or less. 

There was, of course, a great variation in the number 
of times different rifles were fired during the war, but 
it Is known that tens of thousands of Japanese rifles were 
totally Incapacitated, and that when the war ended but a 
small proportion of the rifles In use were in good condi- 
tion. During later battles the self-inflicted casualties in 
both armies due to defective rifles noticeably Increased, 
and must have given serious concern to commanders and 
governments. It Is possible that by this time Japanese 
arsenals could have, by manufacture and repair, replaced 
worn-out rifles with others of the same pattern; but It Is 
Improbable that such a course was adopted, for with 
plans under way to provide a new weapon, and in the 
absence of urgent necessity, this would seem a useless ex- 
pense. 

Although Japanese artillery, especially In early stages 
of the war, exceeded that of the Russians In effective- 
ness, this was entirely due to superior handling and pre- 
ponderance of guns. The field pieces used by Japanese, 
which followed a French design now superseded, are as 
a weapon inferior to that with which the Russian army 
is provided, both In mechanism and range; and are con- 
sidered out-of-date weapons, In comparison with models 
with which German, English, French and United States 
armies are now provided. Moreover, the powder used 
proved very erosive, and deterioration of guns was rapid. 



8o THE FAR EASTERN QUESTION 

In later battles it was noticed that Japanese artillery was 
less effective than it was earlier in the war, which was at- 
tributed, probably correctly, to deterioration of the guns 
from use. 

Since the war Japanese officers have visited Europe and 
the United States for the purpose of inspecting the new- 
est military appliances and formulating a report which 
may, added to experience gained in the field, serve as 
a guide for improvement of their own equipment. Some 
results of these investigations already are apparent. A 
new model Arisaki rifle recently has been issued to some 
regiments, which is considered to be an improvement 
upon the old model, having a longer barrel and a larger 
calibre; but it is not definitely known whether the entire 
army will be supplied with this weapon. It is, therefore, 
fair to assume (Indeed, such Information as can be ob- 
tained bears out this assumption) that the Japanese Army 
still to-day is largely armed with rifles which were used in 
the war with Russia. A new field piece also made Its ap- 
pearance at the last maneuvers, being a replica of a late 
French model, and provided with steel gunner shields ; but 
only a few batteries of these guns are now in use. It Is 
doubtful if models for new rifles and field pieces have 
been finally adopted. When this is done it will take sev- 
eral years for Japanese arsenals, even with increased capa- 
city, to produce an equipment sufficient to supply an army 
in a great war. Many reforms of minor equipment and 
impedimenta, suggested by experience during the last war, 
are under consideration by the general staff, and It will 
be some time before these details are worked out and 
the results become apparent in the efficiency of the army. 
A considerable number of guns and rifles were captured 
from the Russians, which might be used in a pinch, but 



JAPAN'S MILITARY STRENGTH 8i 

they are hardly worth considering in any scheme to estab- 
lish the army on a more modern basis, owing to funda- 
mental differences in construction and calibre, which can- 
not easily be made to harmonize with that uniformity of 
armament which is considered indispensable to modern 
efficiency. 

Much exaggerated comment about supposed marvel- 
ous appliances invented and used by Japanese against 
the Russians, wonderful explosives and devices, and so 
forth, has been printed. The truth is that in all es- 
sentials of modern military and naval art Japan's relation 
to the West is still that of a " copy-cat." During the 
war the western world heard a good deal about the won- 
derful success of the Japanese In keeping their military 
equipment and appliances secret. The gist of this matter 
Is aptly illustrated by an anecdote related about a pass- 
age between a French military attache in Manchuria and 
a Japanese staff officer. The military attaches were dis- 
gruntled about their treatment, and the refusal of the Jap- 
anese to let them see the operations. On this occasion the 
French officer had requested permission to inspect some 
Japanese field artillery, only to meet with the usual eva- 
sion and delay. Finally, becoming Impatient, he pressed 
for a definite answer to his request. 

" But," suavely replied the Japanese officer, " you must 
appreciate the. Importance to us of keeping our military 
secrets." 

" Your secrets. Bosh ! " exclaimed the French officer, 
his disgust for a moment getting the better of his man- 
ners, "as If you hadn't stolen everything you have from 
us." 

It took considerable palavering, so I am Informed, to 
span the diplomatic gap caused by this blunt. If truthful 



82 THE FAR EASTERN QUESTION 

utterance. The fact is that all of Japan's major mihtary 
and naval appHances are directly taken from the West, 
usually without any regard to patent or copyrights. 

The personnel of the Japanese navy is drawn from 
practically the same sources as the army, but the condi- 
tions are sHghtly different, owing to variations in the two 
branches of the service. It is harder to train a good 
man-of-war's man than to make a fairly competent soldier, 
a fact which is recognized in most modern naval regu- 
lations and enlistments. In Japan naval service Is 
compulsory, the regular term being four years, while, 
as in most navies, special Inducements for longer enlist- 
ments are offered. As to the army, bonuses were given 
just prior to the war to retain experienced men In 
the service, with about the same results. The perpetual 
existence in Japan of a large seafaring population insures 
plenty of good naval material, although conditions sur- 
rounding modern naval service do not demand a large 
number of " sailors " In the old meaning of the term. An 
active, clear-headed boy off an inland farm is apt to make 
as good a gunner, or what not, as a youth raised within 
sight of the salt water. 

In Japan the human material Is good enough, neither 
much better nor worse than the average run of such ma- 
terial In European countries, and not so good as en- 
listed men in the United States navy. But the problem 
which confronts the Japanese admiralty Is the same as 
elsewhere, the task of continually whipping a lot of green 
recruits into an understanding of their duties and develop- 
ing competence therein; and in this it has no advantage 
over any of its rivals for naval supremacy. The present 
naval personnel has followed very much the same course 
since the war as has the army; which means that probably 
not more than 20 per cent, of enlisted men now serving 



JAPAN'S MILITARY STRENGTH 83 

saw anything or very much of the war with Russia. Any 
assumption that the average Japanese is capable of absorb- 
ing military or naval instruction more rapidly than the 
average European or American has, so far as I know, no 
foundation upon fact. 

As to naval units, expressed in ships, Japan's equip- 
ment on sea is by this time tolerably well known, through 
numerous statements which have been pubHshed. Much 
comment assumes that the equipment of the Japanese navy 
is as efficient to-day as it was when war with Russia began. 
This, in reason, must be far from the truth. Aside from 
wear upon the vessels and machinery, and damages sus- 
tained in action, (which may or may not have been fully 
repaired,) there is the vital factor of armament. No 
modern naval armament has ever before been subjected 
to such a strain as was put upon that of the Japanese navy 
during the recent war. The limited Hfe of large guns, 
when fired with full charges, is well known. They be- 
gin to deteriorate after a score or so of shots, and about 
one hundred shots is considered the maximum consistent 
with safety. It is then necessary to insert a new rifling, 
which requires that the gun be taken from the ship. It is 
known that new guns were placed upon several Japanese 
ships during the war, and that many guns were re-rifled. 

Notwithstanding the care taken to keep such details 
secret, it is now known that damage sustained by the Jap- 
anese Navy during the war was far greater than is pop- 
ularly supposed, and that during the closing period of 
the war many Japanese ships carried guns which could 
not, for various reasons, be fired. This condition, which 
would be disastrous if a navy had to meet a formidable 
enemy, made no practical difference in the closing stage 
of the war. I learned directly from an expert, who was 
on board one of the Japanese armored cruisers shortly 



84 THE FAR EASTERN QUESTION 

after the fight in the Korean Strait, that this vessel had 
to be towed into Sasebo during the battle, and that not i 
a single gun of her primary battery could be fired. Yet 
in no report of the engagement that I have seen was any 
serious damage to this ship stated. I have information of 
many similar instances. 

It may be pointed out that, assuming the truth of all 
this, ample time has elapsed within which full repairs 
could have been made, and all the larger Japanese ships 
fitted with new guns, including modern sighting and fir- 
ing apphances", with which few were provided during the 
war. This is true; but there are circumstances which in- 
dicate that the task of refitting the Japanese fleet has not 
progressed so rapidly as the Japanese admiralty would 
have the world think. It is pretty well established (as 
I learn from reliable sources which I am not at liberty to 
divulge) that in the last great naval battle many Jap- 
anese ships carried defective guns, which were used with- 
out regard to risk or loss in accuracy, while some carried 
guns which could not be fired at all. 

If this is true, the reason must have been that guns 
to replace defective ones were not then available, for it 
will be remembered that a prolonged period of compar- 
ative Inactivity preceded the arrival of the Russian 
fleet, ample for docking and repairing, in turn, of most 
of the Japanese ships, without weakening the fleet 
to a dangerous point. It is reasonable, then, to conclude 
that there was a shortage of large guns in Japan when the 
war ended. Such guns can be obtained in two ways — by 
manufacture in Japanese arsenals and by purchase abroad. 
If any large purchase of naval guns by Japan has been 
made abroad since the war, it has so far escaped the vigi- 
lance of rival admiralties. But Japan has announced 
that she will In the future build her own guns, and 



JAPAN'S MILITARY STRENGTH 85 

has made extensive preparations to do so. National se- 
curity is given as the chief reason for this poHcy, for dur- 
ing war such materials are contraband; but another rea- 
son, and one which appHes to Japan's present fiscal 
situation, is economy. Why should Japan pay a high 
price to English, German, or French gunmakers, when, by 
appropriating the patent rights and importing machinery, 
she can provide them much more cheaply herself? 

This is the key-note of Japan's re-equipment policy, 
which applies to both the army and navy. Had there ex- 
isted an urgent need for rearmament, rush orders would 
have been placed abroad. But there was no immediate 
need, apparently. So shops and arsenals have been built, 
and others planned, whose industrial basis is the employ- 
ment to be afforded by rearming and re-equipment of 
the army, and navy. Examination of certain phases of 
Japan's new industrial policy indicates her intention in this 
matter. As to the ships captured from Russia, they were, 
as a rule in even worse condition than the Japanese ships, 
and many required to be floated, which was accomplished 
with difficulty in many cases, and at great expense. Any 
assumption, therefore, that the Japanese navy, as a whole, 
is to-day on a high plane of efficiency as to equipment, com- 
pared to other first-class naval powers, does not seem to be 
well founded. 

It seems to follow, then, that the Japanese army and 
navy, instead of being composed of veterans fully 
equipped with the most modern appliances, is really 
largely composed of recruits chiefly armed with worn and 
comparatively out-of-date weapons. An almost invariable 
experience of war, especially of nations which wage success- 
ful wars, is that a perceptible slump in military morale 
and efficiency immediately follows the conclusion of peace. 
This is partly due to conditions tending to material de- 



86 THE FAR EASTERN QUESTION 

preciation, and partly to natural reaction. There is no 
reason to believe that Japan is any exception to this gen- 
eral rule; on the contrary, there is much evidence that 
the usual condition exists in full measure. I hold the 
opinion that if the Japanese army and navy were to-day 
suddenly called upon to confront on equal terms those of 
any first-class power, excepting Russia, they could do so 
only at a disadvantage; for if we assume that personnel 
and training are approximately equal, deficiency in equip- 
ment would throw the balance out of plumb. 

The small numerical strength of the United States 
army, and the fact that many months must elapse after a 
declaration of war before large bodies of troops can be 
brought into collision, lessens the practical effect of com- 
parative efficiency of standing armies upon the ultimate 
result of any war In which our Nation may become en- 
gaged. • But naval affairs are, different, and here such 
comparisons hold good. The fact that, under ordinary 
circumstances, it will be several years before the Jap- 
anese army and navy is fully rearmed and equipped, 
provides other nations who may fear a collision with 
doughty Nippon sufficient time for preparation should 
they wish to take advantage of it, and conveys tolerably 
definite assurance that in the meantime Japan will not be 
belligerently aggressive in any diplomatic differences 
which may arise between her and another great nation. 

That Japan is as rapidly as is possible, considering her 
fiscal difficulties, placing herself on a war footing, cannot 
be doubted. Extensive fortifications are being made at 
Port Arthur; at Masan-po and Gensan in Korea; and in 
Formosa. Japanese naval parties were detected survey- 
ing a number of uninhabited islets, now unclaimed by any 
nation, in Phihppine waters, whose only conceivable value 
would be as locations for wireless stations. The navy 



JAPAN'S MILITARY STRENGTH 87 

has been augmented by the addition of two vessels of the 
Dreadnaught type, and by several cruisers of almost equal 
strength, while preliminary naval estimates plan for 
two additional " Dreadnaughts " and two " Dreadnaught " 
cruisers a year, beginning with 1909, and to continue until 
the navy shall have reached a " desired strength." 

One is somewhat at a loss definitely to determine just 
where the extraordinary sums which have been spent since 
the war on the army and navy have been applied. It 
seems probable, as is alleged, that some of the money 
has been put to indirect military uses; such as the so- 
called Oriental Development Company, which is expected 
to export annually 4,000 Japanese to Korea and Man- 
churia to be there converted, it is stated, into gendar- 
merie to replace the standing army In those localities. 
There are some who regard this and similar moves as 
merely indirect methods of reinforcing Japan's military 
strength on the continent without attracting attention. 
Significance also is attached by some to the fact that many 
army recruits of the 1906-8 drafts have been released 
after from three to six months' service, which Intimates 
a desire to make available a large number of men who 
possess some military training. These are but catch- 
straws, It Is true, and may have no positive bearing upon 
Japan's militant policy; but the East Is now In a nervous 
state, and Japan's slightest acts of this nature attract at- 
tention. 



CHAPTER VIII 

POLITICAL TENDENCIES IN JAPAN 

Structure of the Government — Basis of Popular Par- 
ticipation — The Suffrage — The Parliament — House 
OF Lords — House of Representatives — The Elder 
Statesmen — Political Parties — Control by the Oli- 
garchy — Political Corruption — Gradual Awakening of 
THE Masses — Their Exploitation by the Oligarchy — 
The Burden of Taxation — Policy of the Saionji Min- 
istry — The Commercial Class — New Political Forces 
— " Government Worship " — The Emperxdr — The Im- 
perial Household in Trade and Finance — Growth of 
Socialism — Prospects for Reform — Influence of West- 
ern Sentiment. 

Certain tendencies of the internal political situation of 
Japan indicate that the nation is rapidly approaching a 
point when it must choose between two widely diverging 
courses: whether to be controlled indefinitely by the aris- 
tocratic military oligarchy which now directs the Govern- 
ment, or whether to accept the guidance of a new party 
which primarily aims to develop, by peaceful means, 
the resources of the country. This question is interesting 
to the world both as an example of some forces in human 
evolution, and because the conditions which attend and 
must in time determine its course will decide, also, the 
policy of Nippon in the whole East. 

The forces which are pressing the nation toward a crisis 
are already sufficiently outlined to Intimate distinctly that 
administrative reorganization, if it comes, will touch the 

88 



POLITICAL TENDENCIES IN JAPAN 89 

foundation of the national edifice; and this invites some 
passing notice of the Government of Japan as it exists 
to-day, of Its structural theory, and of the system by 
which this theory presumably Is put into practice. 

While the Government has the outward form of a con- | 
stitutlonal monarchy, it Is an error to assume, as many 
persons do, that It approximates liberal principles as these 
are understood in America. The form is here. There 
are a constitution, a responsible ministry, a Diet composed 
of two houses, and a judiciary which interprets and en- t 
forces the laws. But scrutiny of the method through \ 
which these familiar entities administer government re- 
veals that the essence of liberal Institutions Is largely ab- 
sent. In framing a constitution for Japan It was natural 
and perhaps then necessary that the fiction of Imperial su- 
premacy, as the head and source of all authority, be 
adopted In the phraseology of the Instrument. So the 
fact that the constitution apparently makes the executive, 
legislative and judicial branches mere appendages upon 
the Emperor's authority and subject to his will might be 
disregarded if In practical administration of government 
the people exercised substantial control. But this Is not 
the case. 

Under modern conditions the basis for popular partici- t 
pation In administration of government is the suffrage, '\ 
and In Japan the total number of voters In national elec- 
tions is under 800,000; less than 2 per cent of the total ) 
population, as compared with 25 per cent In France and / 
21 per cent In the United States. In addition to the aris- \ 
tocracy, the suffrage is granted to commoners under prop- 
erty and tax paying qualifications which confines Its exercise I 
to the upper and a limited middle class. The great labor- 
ing class, comprising 90 per cent of the population of the 
Empire, and constituting the productive force of the na- 



90 THE FAR EASTERN QUESTION 

tion, is practically unrepresented among the voting section, 
and the only constitutional privilege which it has is the 
right of petition to the Throne. 

In constitutionally distributing the balance of power 
among the various classes, care was taken to circumscribe 
the influence of even this limited electorate. The upper 
branch of the legislative body, the House of Peers, is 
composed of male members of the Imperial family and 
the hereditary nobility, some additional life members 
nominated by the Emperor for meritorious service to the 
State (usually military and naval heroes) ; and one mem- 
ber nominated by the fifteen electors in each Fu or Ken 
who pay the highest taxes, the nominations to be affirmed 
by the Emperor, such members to serve for seven years. 
The House of Peers thus is composed of a large majority 
of Princes and nobles, and a minority of members nomi- 
nated by a very limited and wealthy class comprised of 
less than 700 voters. The so-called popular branch of 
the Diet, the House of Representatives, is elected by gen- 
eral vote; that is, by the 1.6 per cent who possess the suf- 
frage. There are 368 seats, distributed among the forty- 
five cities and prefectures, or Fus and Kens ; giving an av- 
erage of some 2,000 voters to a district which would have 
In the United States, on an equal basis of population, 
_about 26,000 voters. The House of Representatives, 
therefore, lacks any essential democratic quality except that 
a democratic spirit Is evinced by individual members ; and 
really Is an aristocratic body whose political aspirations 
are chiefly to further special interests, and secure a place 
in the ministry or a seat In the House of Peers. 

The Diet which together with the ministry thus directs 
the Government nominally is composed of parties. These 
so-called parties are not exactly comparable to political 
parties In England, Europe and the United States; In 



POLITICAL TENDENCIES IN JAPAN .91 

fact, Japan has not yet developed a system of govern- 
ment by party, although she has adopted the nomencla- 
ture of such institutions. The House of Peers scarcely has 
gone this far, for while its members sometimes divide 
into groups, none of these groups has developed any 
permanency or adopted a regular party name. The House 
of Representatives is divided into groups which take party 
names, but these names are not always carried over into a 
new Diet. This disposition affords a clue to the real 
relation of the people and the Government. TTie Gov^ 
ernment is not, apparently, presumed to represent the j 
people and to carry out their wishes; but in so far as I 
the proletariat is permitted to participate in political 1 
matters it is In the attitude of being graciously invited 
by the Emperor to assist him In administering the Gov- 
ernment by nominating a few Peers and electing a House 
of Representatives, which will support the Emperor in 
caring for the welfare of his subjects. When a general 
election for a House of Representative's Is ordered, the 
campaign usually is not carried on by parties or along 
party lines. Each candidate makes a personal campaign 
on his own Issues. It Is not until the new House Is organ- 
ized that parties are formed, and their composition de- 
pends upon how the men who are elected will di- 
vide upon Issues which come up for discussion. Thus 
party lines rest lightly, and parties are more a grouping of 
individuals for mutual advantage than means to promote 
definite political programmes. 

The present parties In the House of Representatives 
are: Seiyu-kal, Progressist, the Daido Club, the Yuko- 
kwal, and a number of scattering votes not attached to any 
regular group. Of these parties, the Seiyu-kal Is the Gov- 
ernment group. The Progressist Is the opposition. Of 
the two lesser groups, the Daido Club really Is a branch of 



92 THE FAR EASTERN QUESTION 

the Government forces, although it poses as independent. 
Its nominal position in the House is the Center, and it 
holds the balance of power in most divisions, which gives 
it considerable influence. None of these parties has any 
definite principles or programme, and all are ready to trade 
votes with other groups as occasion may arise. 

The remaining factors in the Government are the Em- 
peror, the ministry and the Genro, or Elder Statesmen. 
The ministry is here organized much as elsewhere, usually 
being composed of men who represent different influen- 
tial political groups, and holds ofiice until its resignation 
is accepted by the Emperor. In this matter authority 
rests with the Emperor, and the influences which direct his. 
action are not always easy to trace. In any crisis it is 
usual for the Emperor to consult the Genro, and it is pre- 
sumed that he attaches great weight to its advice, although 
he has power to reject it. One hears in Japan varying 
opinions about the personality of the present Emperor. 
Many regard him as the usual figurehead, occupying him- 
self, after Oriental fashion, with sensual pleasures, and 
leaving the cares of government to his ministers. The 
Crown Prince is generally regarded as being dull, almost 
a booby, and is not entrusted with responsibility. The 
estimation in which the Emperor is held by the masses also 
Is a disputed matter. Outwardly, he is venerated as 
the spiritual and temporal head of the nation; but indi- 
cations that this sentiment is only skin-deep may be ob- 
served, and an idea that the Emperor Is used as a cloak 
for the oligarchy which really rules the nation is percolat- 
ing among the people. The Genro has no specific 
entity or regular membership, and is composed of distin- 
guished men who have no definite political position except 
seats in the House of Peers, and that gained through 
their personal Influence. Count Okuma, himself an El- 



POLITICAL TENDENCIES IN JAPAN 93 

der Statesman, recently said In public that the Genro has 
outlived its usefulness and must, with other obsolete forms, 
give way to more modern administrative methods. But 
Okuma is known to be a democrat at heart, and usually is 
found among the opposition. 

When analyzed, the Government of Japan Is found to 
be entirely in the control of an aristocratic oligarchy, com- 
posed of the Imperial family, three or four of the greater 
clans of nobility, the military class, and a strata which in- 
cludes the chief financial and commercial groups together 
with minor representation of the superior business ele- 
ment. The House of Representatives, which is presumed 
to represent the popular Influence in Government, real- 
ly, as now elected and organized, fails to do so. There 
Is little doubt that seats in the House of Representa- 
tives may be purchased. This decline in political mo- 
rality Is attracting attention In Japan, and several or- 
ganizations having as an object the purification of politi- 
cal methods are taking up the work. The last prefec- 
tural elections were attended, it is alleged, by such whole- 
sale coercion and fraud as to compel the attention of the 
ministry, and caused a leading vernacular newspaper to 
assert that " the Japanese political world Is rotten to the 
core." It was openly asserted that votes were bought 
for two Yen, and seats in prefectorial assemblies were 
estimated to be worth Yen 2,600.00. I am, of course, 
not able exactly to determine the truth of such allegations, 
but evidence that modern forms of political corruption 
have found their way into Japan may be noted on all sides. 

It is probable, however, that the oligarchy might have 
continued to rule without being disturbed by any except 
internal dissensions had It pursued a conservative course 
and managed affairs with ordinary success. But the last 
few years have brought an awakening among the peo- 



94 THE FAR EASTERN QUESTION 

pie of Japan, or at least of an influential segment of 
them, and the oligarchy is now confronted with a fight 
for a division of its power; indeed, its very existence 
is at stake, although perhaps not immediately threat- 
ened. Several major causes have contributed to create 
this situation. These are: the nationalization of indus- 
try policy; the diversion to the oligarchy, by means of 
subsidies and other forms of governmental preference, 
of most of the advantages and pecuniary increment which 
the national expansion is creating; the expenditure of so 
large a proportion of the national revenue for armaments; 
the increase of taxation which, as a direct consequence of 
the foregoing policies, has been indefinitely saddled upon 
the people; and the bringing of the nation to the brink of 
a financial precipice which is a result. 

The real crux of the trouble lies in the economic situ- 
ation of the country; but the causes which have reduced It 
to its present extremity need here be considered only in the 
light of their incidental political effects. One of the more 
conspicuous examples of exploitation of the people by the 
oligarchy is afforded by the encroachment of the Imperial 
Household upon commerce and industry of the nation. 
The extent to which the Household Is interested in 
modern enterprises cannot exactly be ascertained for ob- 
vious reasons, but it is known to have large holdings (a 
controlling share in some cases) in two of the great ship- 
ping companies, two of the greater banks, an iron foun- 
dry, cotton mills, a paper mill, a lumber company, ship 
yards, and some minor concerns. With two or three 
exceptions, this interest has been acquired in the course 
of the sudden Industrial expansion which followed the 
war. It Is significant that all important enterprises in 
which the Household Is Interested derive heavy subsidies 
from the Government; indeed, in forming some of these 



POLITICAL TENDENCIES IN JAPAN 95 

companies it seems to have been understood that to enhst 
the Household was to insure direct Government support 
and backing. Corporations in which the Household is 
largely interested are not open to foreign investment, and 
are not included in brokers' lists of the share market which 
are issued to investors. It is assumed that this exclusion 
of foreigners as shareholders in these corporations is to 
avoid possibility of litigation which might compel elucida- 
tion of their ownership and methods in court. Examina- 
tion reveals that a large proportion of the major activities 
of new Japan are virtually controlled by the element which 
composes the inner circle of the ruling oligarchy. In no 
other important nation is special privilege so strongly en- 
trenched as in Japan, or is able to deflect to itself so large 
a percentage of the wealth which the people create. 

This condition, which is here attended by the usual 
complexities, would hardly have attracted the attention of 
the ignorant proletariat had it not made necessary and 
been accompanied by imposition of burdensome taxation. 
When, during the war with Russia, the taxation, which 
ten years ago was less than Yen 6.00 per capita, was raised 
to Yen 15.00 per capita, popular discontent was assuaged 
by assurances that the increase was temporary, and that 
the nation would recoup by exacting an indemnity from 
Russia which would pay expenses of the war. Thus 
the people accepted the burden without serious objection, 
and readily invested their surplus funds in domestic war 
loans. The first shock came when it was learned that no 
indemnity had been obtained from Russia. The second 
came when the Government was compelled to extend the 
extraordinary war taxes for thirty years, with no assur- 
ance that they can be reduced even then. 

In this connection it is interesting to examine how tax- 
ation is distributed. In Japan, as in most countries, the 



96 THE FAR EASTERN QUESTION 

indirect method of taxation is used whenever practicable; 
and in revising the fiscal system to meet the swelling bud- 
get this plan was adopted. In both the customs tariff and 
internal revenue laws an evident attempt is made to give 
an impression that the burden will fall upon the middle 
class, but scrutiny reveals that quite the contrary is true. 
To raise any considerable revenue, taxation must be 
placed upon articles and matters widely used. So analy- 
sis shows that while the middle class in Japan seems to 
bear the greater part of the burden, it is only a middle- 
man between the Government and the consumer who even- 
tually pays the tax. In adopting this policy the Govern- 
ment utilized the commercial class as a means of collection 
because it can be regulated and controlled, not that it 
bears more than its proportion of taxation. To assume 
that the camparatively well-to-do middle class in Japan 
pays a larger proportion of taxes is like asserting that 
tobacco and liquor manufacturers in the United States pay 
the internal revenue on their products because the Govern- 
ment, for its convenience, makes them the medium of col- 
lection. It is difficult to determine this matter with exact- 
ness, but I beheve that the segment of the Japanese peo- 
ple which has no vote pays 80 per cent of the national 
and local taxes. The proletariat in Japan to-day is in a 
state of political and industrial peonage, and really has 
less influence in the Government than has the moujik in 
Russia, or the coolie in China. 

After this glance at political conditions, some effects of 
the policy of the Saionji ministry may be better under- 
stood. The last Diet passed a budget which appropri- 
ates 40 per cent of the total revenue for armaments, and 
preliminary proposals for the year 1908—9 contemplate 
devoting 60 per cent of the revenue for this purpose. In 
order to carry out this programme, the Government pro- 



POLITICAL TENDENCIES IN JAPAN 97 

posed and the Diet passed a new extraordinary tax law, 
which Increases the per capita taxation to over Yen 16.00; 
and the Increased schedules are not yet completed. This 
Is the third In the series of shocks which has shaken popu- 
lar faith In the oligarchy, and started a movement to check 
its power and compel an alteration of the national policy. 
The forces by which this movement is propelled extend 
downward through all strata ; but any hope for success de- 
pends upon that part of the commercial class which is not 
included in the preferential distribution of national sup- 
port, and which now finds that It is being seriously handi- 
capped by this discrimination. Although the masses are 
keenly conscious that their situation is growing worse, 
they have no direct means for political expression, 
except by riotous demonstrations. But the commercial 
class Includes a majority of voters, and has a means for 
developing political cohesion ready to hand in the local and 
national chambers of commerce. When the extraordinary 
tax bill was before the Diet in 1908 a general agitation 
against It was begun by the chambers of commerce, which 
passed many resolutions condemning the economic and fis- 
cal policy of the Government, and took part, through the 
members which they could influence, in the attack upon 
the budget In the House of Representatives. The agita- 
tion failed, for the moment, to have any result except that 
the Government somewhat brusquely rebuked the guilds 
for mixing In political affairs, and warned them that fur- 
ther agitation might lead to revocation of their charters. 
This implied threat, however, only fanned the flame. 
Many of the guilds retorted that they have a right to be 
active in politics when the economic interests of the na- 
tion are under consideration, and intimated that they In- 
tend to take part whether they have a right or not. Steps 
were taken to contest the next general election for the 



98 THE FAR EASTERN QUESTION 

House of Representatives on this issue, and the movement 
developed a vitality which causes the Government some 
uneasiness. In instituting this campaign, it was pro- 
posed, for the first time in Japan, to nominate candidates 
for the House of Representatives along party lines and 
on a definite platform advocating reforms. If this 
should be done it would carry the struggle for control 
of the lower house directly before the electorate and 
compel a popular discussion of the issues. The Govern- 
ment is anxious to avoid this, for no one can foresee 
what the effect would be upon a people just waking to a 
desire to convert the forms of popular institutions into a 
reality. 

Newspapers in Japan nowadays are openly criticizing 
the extension among the people of certain obsolete ideas, 
which are lumped under the head of " Government wor- 
ship." It is argued that this popular idea is injurious to 
progress of the nation along modern lines by making 
it difficult for any enterprise not directly backed by the 
Government to succeed, which is creating an industrial 
and commercial centralization calculated to eliminate 
competition and confine profitable enterprises to a favored 
few. In discussing the matter some native papers use 
the word " superstition " to describe this popular idea, and 
assert that superstition has no place in Japan today. As 
such criticism clearly touches the halo which surrounds the 
Imperial throne, and which is an important asset to the 
oligarchy in perpetuating its rule, it will be understood 
that such disposition is not regarded favorably by the 
Government, and in some quarters it is rebuked as being 
directed askance at the Imperial authority. Indeed, this 
may be true, for there are indications that socialism is 
taking root in Japan, and a powerful though ignorant 
cooliedom is beginning to clamor for its political rights. 



POLITICAL TENDENCIES IN JAPAN 99 

While these Incidental political signs forcibly strike 
the foreign observer, It Is very doubtful If their potential 
force Is now appreciated by the oligarchy. There is no 
doubt that the Government for months before Its down- 
fall realized that the Saionji ministry must go. Marquis 
Salonji and his colleagues several times tendered their 
resignations, but were compelled to retain office until the 
budget and other administrative matters were got out of 
the way. The Government did not want a general elec- 
tion to come while its failure (from the Japanese view) 
in the immigration Issue with America was in the popular 
mind, and while the agitation against increased taxation 
was strong. The election was first set for April, 1908; 
then It was postponed until June. The course of the Gov- 
ernment Indicated that notwithstanding willingness of 
the Saionji ministry to resign, it would not bring on an 
election until sure It could carry It. The result of the 
general election held in June, 1908, conclusively demon- 
strated that, notwithstanding talk of serious opposition, 
the oligarchy Is still In full control. The Government 
lost a few seats In the House of Representatives, but re- 
tains a substantial majority. 

While some foreign observers of Japan's political insti- 
tutions and present situation believe that the views of the 
chambers of commerce will find substantial expression In 
the policy of the present and forthcoming ministries, I am 
unable to feel this assurance. However, an attempt Is 
being made to give an Impression throughout the world 
that Japan intends to call a halt upon the military party, 
which has, by Imposing on the nation the expenses of 
large armaments, brought its finances to their present pass. 
The need to create this impression abroad is obvious, since 
it has been distinctly Intimated that foreign investors are 
reluctant to contribute funds for an unnecessary military 



loo THE FAR EASTERN QUESTION 

and naval expansion In Japan at the expense of activities 
which may resuscitate her depleted resources. 

But when one looks about In Japan for tangible evi- 
dence of a radical change of poHcy it is not easy to 
discover. It Is difficult for Americans to conceive the 
arrogance of the military party there, although they may 
understand its reluctance to relinquish the place to which 
popular post-bellum enthusiasm for the army and navy 
raised it. Seeing the approach of the storm, the Saionji 
cabinet was anxious to quit office before it breaks, but was 
retained for a time because of the difficulty in forming a 
ministry to succeed it. Of the men who were suggested 
to succeed Marquis Saionji there is none who Is not inti- 
mately associated with the military party. Marquis Kat- 
sura was several times invited to form a ministry, but was 
reluctant to do so, it is thought, because he apprehends the 
downfall of the present regime. Of others prominently 
mentioned, from time to time, for the premiership, there is 
none whose career does not warrant a presumption that he 
inclines toward the present order. It is probable that 
financial and commercial interests of the nation will have 
recognition in the policy of the new cabinet; but this does 
not necessarily mean a sincere reaction from present pol- 
icy, for most of the financial and commercial leaders 
are beneficiaries under existing conditions. It Is quite 
likely that some of these men feel that the nation has been 
forced too far in this direction, and that some reformation 
is necessary to prevent disaster. They need not be ex- 
pected, however, to strike very deeply into the heart of 
existing evils. Of the Progressist party, It may be said 
that Its opposition to the Government is that of the 
" outs " to the " ins," and is advanced more to embar- 
rass the ministry than in a truly reformatory spirit. It 
Is significant that casual Progressist attacks upon the for- 



POLITICAL TENDENCIES IN JAPAN loi 

eign policy are not because it threatens to embroil the na- 
tion with formerly friendly powers, but because it has not 
adopted a more belligerent attitude in conducting nego- 
tiations with America and China. 

Considering all the elements presently applicable to the 
situation, it is doubtful if political forces which can effect 
a regeneration of the Government now exist in Japan in 
a form so they may quickly be called into play; and that 
a ministry capable of really reforming the administration 
can now be organized. An attempt must be made, it is 
true; and that the Katsura cabinet took office attended 
by many fair promises was to have been expected, as prob- 
ably will be the case with its Immediate successors. But 
the oligarchy and its concomitant, the military party, 
are too deeply rooted to be pushed aside easily, and none 
need expect that they will yield without a struggle, al- 
though they may temporarily bow to necessity to restore 
the national credit. But one can hardly doubt that Japan 
is nearing a parting of the ways. The forces of reform 
may distinctly be felt pressing upward from the bottom, 
and the struggle to break through the oligarchic crust can- 
not fail to attract the sympathy and notice of the western 
world. 



CHAPTER IX 

THE FISCAL SITUATION OF JAPAN 

Some Results of Economic Innovations — Intrusion of 
THE Government Into Business — Its Creation of Assets 
— Nationalization of the Railways — Stalking the For- 
eign Investor — Optimism in the Saddle — Increase in 
Capitalized Industries — Basis for This Expansion — 
Shyness of Foreign Capital — Reasons for This Disposi- 
tion — Collapse of the "Boom" — Fiscal Condition of 
the Nation — Increase of Taxation — Wages in Japan — 
Proportion of Per Capita Taxation to Earnings — De- 
cline OF THE National Ownership Policy — Discontent 
OF the People — External Pressure Upon Japan — A 
Crisis Approaching. 

In attempting to estimate Japan's position among the 
powers, the economic condition of the nation should be 
considered. This Induces some further examination of 
her modern activities, and of antecedents of the commer- 
cial and financial depression which followed and is partly 
a result of the new policy. 

Enough time has elapsed since this economic Innovation 
was Inaugurated to indicate some results of It both exter- 
nally and Internally. The external results are significant, 
but perhaps they may better be viewed from a different 
angle. It Is the internal effects which have more directly 
contributed to create the crisis through which the national 
economies are now passing, and with which the Govern- 
ment Is compelled to reckon before It can aggressively 
proceed with prosecution of external expansion. 

I02 



THE FISCAL SITUATION OF JAPAN 103 

While there are many correlative forces, the intrusion 
of the Government into purely business affairs of the 
country is a principal cause of the trouble; which makes 
a brief review of the progress of the national ownership 
policy pertinent. It has been said that in adopting this 
policy Japan introduced no novelties — only extremities ; 
and this is substantially true. And the circumstances 
which attended its initiation, as already has been pointed 
out, conclusively intimate that expediency played a deci- 
sive part in its adoption. The first pressing need of the 
Government after the war was revenue; and a Govern- 
ment obtains money, as a rule, in two ways: by taxation 
and by borrowing. It had been necessary to hypothecate 
most of the available assets controlled by the Govern- 
ment to secure foreign war loans, and it was felt that 
it was not practicable to immediately again increase tax- 
ation. On the contrary, the Government, then facing the 
popular indignation which failure to get an indemnity 
roused, felt it necessary to defer announcement that the 
extraordinary war taxes must be Indefinitely continued. 

In this extremity the Government set to work to create 
assets amenable to its control and which It might if oc- 
casion demanded hypothecate, and also to attract for- 
eign capital to the support of Japanese enterprises. It is 
not necessary here to examine In detail the various meth- 
ods pursued to accomplish this end, since the purport of 
the policy may be Ulustratejd by a few pertinent examples. 
Among these is nationalization of the railways, and 
the method which was employed In this case is interesting. 
The Government arbitrarily took over the railways at a 
valuation, paying for them with bonds. The project en- 
countered strong opposition, but the measure was forced 
through the Diet, the occasion of Its passage being at- 
tended by disorder In the House of Representatives. 



104 THE FAR EASTERN QUESTION 

In this way the Government secured properties which 
can be made to produce considerable revenue, since 
there is no competition, and which may, in a pinch, 
be further hypothecated to secure a foreign loan. Stim- 
ulated in many cases by governmental assurance of in- 
terest on their bonds, numerous industrial projects were 
capitalized, and an attempt made to induce foreign capital 
to invest in them. For a time this plan had some success, 
but the support of the Government was so obviously a 
plan to aid Japanese enterprises to enlist the support of 
foreign investors that It soon lost force and effect, and in 
time produced a reaction. 

But during the period when optimism was in the saddle, 
which continued for at least a year after the war, the com- 
mercial and Industrial activities of the nation experienced 
an enormous inflation. Recent statistics show that since 
July, 1905, the total capitalization of new enterprises is 
Yen 1,843,224,240.00; of which Yen 1,307,758,800.00 
is invested in new enterprises, and Yen 535,465,440.00 
is increased capitalization of concerns which already ex- 
isted. An idea of the economic ratio of this expansion 
to the normal commercial and Industrial condition of 
Japan may be given by stating that this Increase of cap- 
italization, which immediately followed an exhaustive 
war that more than ^[uadrupled the national debt and 
tripled general taxation, amounts to one-sixth of the es- 
timated total wealth of the country when the war began. 

It is perhaps hardly necessary to say that this astound- 
ing expansion is more apparent than real, and was to a 
considerable extent accomplished by the familiar process 
of " watering." To the extent that they possessed re- 
sources, the Japanese enthusiastically threw themselves 
into the " boom " movement stimulated and directed by 
the Government. In now attempting to explain the Gov- 



THE FISCAL SITUATION OF JAPAN 105 

ernment's reason for so actively taking control, it is as- 
sumed that Japanese are deficient in modern industrial in- 
itiative, that they always have been accustomed to follow 
the lead of the Government, and that unless the Govern- 
ment had taken the lead it would not have been possible 
to so quickly stir the people to action. This may be true; 
but the Government has actively promoted many enter- 
prises with which governments usually do not concern 
themselves. In stimulating national enthusiasm, Man- 
churia and Korea were represented as great potential as- 
sets, and Japanese were encouraged to emigrate to those 
countries. 

The movement did not progress far, however, when It 
began to appear that the factor chiefly relied upon to pro- 
vide the sinews of war, namely, foreign capital, was be- 
coming shy. There were many minor Indications of this 
as the " boom " advanced, but the first serious check to an 
enterprise directly fostered by the Government was the fail- 
ure of the South Manchurlan Railway loan. The manner 
of first advancing this project revealed clearly, to one 
acquainted with conditions in Manchuria, that it was 
grossly overcapitalized, and that a large part of its alleged 
assets consisted of property of uncertain value and whose 
title is In dispute with China. After being tentatively ad- 
vanced in three western countries, with no success, the pro- 
posed loan was withdrawn as originally presented, and the 
last announcement was that the Government has decided 
to itself finance the project. 

The political and practical considerations which, by 
undermining Japan's credit abroad, have contributed to 
bring her national expansion policy up with a round turn, 
have already been partly reviewed, and are essentially ex- 
ternal factors. Briefly, they turn upon suspicion and re- 
sentment in the West at Japan's policy in Manchuria and 



io6 THE FAR EASTERN QUESTION 

Korea, and realization in some quarters that western cap- 
ital loaned to Japan is in her hands being directed against 
western interests in the East. Whatever may have caused 
the change, western investors now have an aversion to 
Japanese securities. To some extent the financial depres- 
sion in the United States, in the year 1907-8, and which 
affected the European market, may be presumed to have 
helped to precipitate a crisis in Japan. But it is reason- 
ably sure that the new expansion movement had lost mo- 
mentum before the so-called panic struck America. 

Experience frequently has demonstrated that nothing 
will collapse more quickly than a " boom " which has 
exceeded its legitimate basis, and reaction in Japan took 
the usual course. The spirit of optimism was succeeded 
by a period of doubt, quickly followed by one of appre- 
hension. This inevitably led to a scrutiny of the Gov- 
ernment's policy, which is now being subjected to severe 
examination. A result is revelation of a condition which 
well may cause the most optimistic believer in the fortu- 
nate destiny of the Empire to pause and take stock before 
advocating continuance on the present course. 

Of vital importance in this connection is the financial 
condition of the nation. The national debt is now ap- 
proximately Yen 2,617,000,000.00, and the annual in- 
terest charge is Yen 166,000,000.00; Vv'hich means a per 
capita debt of Yen 45.00, and an annual interest charge 
per capita of Yen 3.50, or about 8 per cent, per capita of 
annual earnings. While there is nominally a sinking fund 
to liquidate the debt, investigation shows that the exist- 
ence of this fund is due to manipulation in bookkeeping, 
and that it is to some extent a financial fiction. Although 
the admitted deficit in fiscal accounts for the year 1907—8 is 
not large, it was asserted in the Diet that it will reach Yen 
120,000,000.00, which must be cared for by the new tax- 



THE FISCAL SITUATION OF JAPAN 107 

atlon. The apparent deficit is less than this sum, but cer- 
tain estimated revenues, such as those derived from some 
Government monopolies, are believed greatly to be exag- 
gerated and based upon expectations not likely to hold good 
if present conditions continue. 

It may occur to some that this debt Is not a very great 
burden for a nation in modern times ; but such matters are 
comparative, and Japan's financial situation must be 
judged by her resources. These In turn depend upon her 
national productiveness, as expressed In earnings of 
the people who must pay the taxes. The new extraor- 
dinary taxation law raises the annual per capita taxation 
to Yen 16.00 ($8.00), which may not strike Americans 
as burdensome. Let us examine the situation of the aver- 
age Japanese taxpayer. In 1904 an economist estimated 
the monthly economies of an average Japanese family, 
consisting of man, wife and two children, as follows: 

EXPENSES. 

House rent Yen o . 75 

Rice 3.25 

Fuel and light .41 

Vegetables .60 

Fish .60 

Soy and Miss .23 

Tobacco .25 

Hair cutting, etc .18 

Bath ,20 

Pin monej^ ,60 

Sundries, including interest on debts.... 2.37 

Total Yen 9 . 44 

Monthly income 8.28 

Deficit Yen i . 16 



io8 THE FAR EASTERN QUESTION 

If this accurately represents the Income of a lower class 
Japanese family, such a family will to-day be paying an 
annual taxation of 6^ per cent, of its Income. This esti- 
mate was made in 1904, and it is generally agreed that 
since then the earnings of the poorer classes have in- 
creased. No one seems to have gone into the matter 
with the care of the investigator whose estimate is quoted, 
but since 1904 the foreign trade of the nation has In- 
creased 58 per cent., and it is assumed that the productive 
capacity of the country has advanced in about equal pro- 
portion. It Is also, however, true that the average cost 
of living has Increased, chiefly due to a rise In the price of 
commodities caused by raising the import tariff; or, in 
other words, is indirectly due to increased taxation. Well 
informed people differ as to how much wages have ad- 
vanced since the war, and the following extracts from an 
official report recently compiled may be taken as an ap- 
proximation of the facts : 

MEAN WAGES OF WORKMEN IN JAPAN. 

Bricklayers Yen o. 60 per day. 



Masons . . . 
Blacksmiths 
Printers . . . 
Carpenters . 
Weavers . . . 
Silversmiths 
Shoemakers 



50 
45 
53 
70 

33 

45 
55 



These are wages paid In Tokyo, where they are higher 
than is usual throughout the country. Monthly wages In 
Tokyo are as follows: 



THE FISCAL SITUATION OF JAPAN 109 

MEAN MONTHLY WAGES IN JAPAN. 

Sake-distillers Yen 7 . 00 

Menservants 3-32 

Maidservants 2.92 

Silk-worm breeders 9. 00 

Raw silk spinners 6.55 

Farm laborers 3 • 33 

These figures show a slight increase over wages paid 
before the war. Several persons whom I have ques- 
tioned estimate the average earning of a Japanese family 
of four in the lower class at Yen 160.00 annually, which 
requires the children to work. None whom I asked 
placed the figure higher than Yen 200.00 annual income. 
Taking Yen 160.00 as a fair average, the average 
Japanese now pays 40 per cent, of his total earnings in 
taxes. Other comparisons may contribute some light. In 
five years the unproductive charge upon the earning ca- 
pacity of the people, including interest sent abroad and 
military and naval expenses, has increased from Yen 119,- 
000,000.00 to Yen 359,000,000.00, while the population 
has increased 5 per cent. The comparative increase of 
certain pertinent items in the national economies from 
1898 to 1908 follow: 

Increase of population 8 per cent. 

Average increase of earnings 30 " 

Increase of taxation 400 " 

It may be assumed to be possible for superior states- 
manship to extricate a nation from this situation by 
adopting a policy at once reassuring to its creditors and 
calculated to restore fiscal equilibrium by economy in the 
expenditures of the Government, and by beginning a re- 
construction of industrial conditions from the bottom up. 
But there is little evidence that the Japanese oligarchy 



no THE FAR EASTERN QUESTION 

realizes the imperative necessity for such reformation. On 
the contrary, the Government persists in its policy of try- 
ing to lift the nation to power and prosperity by tax- 
ing the people to subsidize industries which the Govern- 
ment desires to promote, often without proper consid- 
eration of whether they can be made profitable. An 
example of this is afforded by the Imperial Iron Works 
at Wakamatsu. In the course of a recent inquiry into 
the condition of this enterprise before a budget sub-com- 
mittee, it was revealed that during the ten years of its 
existence it has cost the nation Yen 56,412,000.00, with 
no reasonable prospect that it will become a paying busi- 
ness. The chief reason for establishing this foundry was 
the alleged necessity for certain materials required for the 
army and navy to be produced In Japan. Shipping lines 
In which the Household is Interested now receive sub- 
sidies amounting to treble the annual dividends which they 
pay, and it is proposed to Increase this subsidy. 

None of the conspicuous instances of Japan's Govern- 
ment ownership policy has caused such popular dissatis- 
faction as the nationalization of the railways. From all 
parts of the country now come complaints that the 'Gov- 
ernment Is permitting the railways to run down, that the 
service Is bad, and Inadequate to meet the business needs 
of the nation. It is known, also, that in other in- 
dustrial enterprises backed by the Government dividends 
have been paid out of subsidies when the concerns were 
not earning a profit, and by permitting upkeep and Im- 
provement to lapse. The publication of such matters 
in Japan gradually sapped public confidence and brought 
on a period of liquidation. The year 1908 witnessed 
a large number of business failures, and hardly a month 
passed without bringing to the surface facts which im- 
paired the standing of some prominent bank or firm. 



THE FISCAL SITUATION OF JAPAN 1 1 1 

Comparison of leading securities with quotations of the 
same period during the previous year shows an average 
depreciation of about 35 per cent. The money rate has 
steadily advanced for three years. Few new projects are 
being actively pushed, and there is stagnation in most 
important lines of business. This condition is attributed 
by some partially to increased taxation, which, by raising 
the price of commodities, has had a tendency to diminish 
consumption. 

Confronted by this condition, the Government seems 
to recognize that it must modify its fiscal policy, but there 
is divergence of opinion as to the plan to pursue. The 
situation quickly could be relieved by striking out of the 
budget the extraordinary expenditure for armaments, but 
the military party has so far refused to yield an iota in 
its demands, and has succeeded in forcing its budgets 
through the Diet. However, something must be done. 
In the course of the next few years, a succession of for- 
eign bond issues must be met, and difficulty in refunding 
is anticipated. Japanese financial interests are uneasy 
concerning the situation, although they publicly profess op- 
timistic views. It is feared by the Government that Eu- 
ropean investors will insist upon the employment by Japan 
of a foreign financial adviser. To be required to thus 
again take a seat in the class, after all that has been said 
about Japan's ability to teach the West, will be so galling 
to Japanese pride that the Government will give any as- 
surance or grant almost any terms to avoid It. 

It is, I think, becoming appreciated in Tokyo that if 
Japan wishes to retain the confidence of western investors 
she must do something else beside borrow money and in- 
crease her armaments. With conservative administration 
and a revulsion from certain centralizing tendencies, there 
Is a field for legitimate investments In Japan, but It is 



112 THE FAR EASTERN QUESTION 

becoming evident that many enterprises actively pro- 
moted and supported by the Government are indirectly 
aimed at western industrialism. The need of effort to 
avert a collapse of her policy may compel Japan to at- 
tempt reformation, but it is doubtful if this will be sin- 
cerely undertaken except as it is induced by external pres- 
sure. 



CHAPTER X 

FOREIGNERS AND FOREIGN INVESTMENTS 
IN JAPAN 

The Opening of Japan — Intrusion of Foreigners — 
Establishment of Their Status — Their Influence 
Upon the People and Nation — The Abolition of Extra- 
territoriality — Alteration of Conditions — Personal 
Rights of Foreigners — Treaties, Laws and Their En- 
forcement — Change in Sentiment Among Japanese — 
Reasons for This Change — Attitude of Japanese Courts 
Toward Foreign Residents — Exclusion of Some Classes 

— Property Rights of Foreigners — Basis for Foreign 
Investments — Defects in the Laws — Inducements to 
Foreign Investors — Placing Japanese Securities Abroad 

— Western Influence Upon the Development of Japan's 
Industry and Trade — Foreigners Still Needed. 

The discussion which, during the last two years, has 
attended the relations between Japan and the United 
States, has had a tendency to bring into prominence is- 
sues bearing upon the status of Orientals in western coun- 
tries, and of Occidentals in eastern countries. Much has 
been printed about alleged mistreatment of Japanese who 
reside in America, and an impression sown broadcast that 
the Washington Government is delinquent in its treaty 
obligations, and that Americans are disposed to adopt an 
attitude offensive to Japan, which gives that nation some 
just ground for diplomatic complaint. Little, however, 
has been said about the status of Americans and other for- 
eigners in Japan and in regions temporarily or permanently 

113 



114 THE FAR EASTERN QUESTION 

under her control. This phase of the matter possesses at 
least equal importance in any correct estimate of the inter- 
national balance, and in view of the persistence of the dis- 
cussion and the dissemination thereby of numerous miscon- 
ceptions, it may be interesting to examine the reverse of the 
picture. 

The residence of foreigners of western origin In Japan 
dates from the early activities of traders and mission- 
aries; but for the purpose of this discussion it is not 
necessary to consider their condition and status before 
the movement which has resulted in Japan taking place 
among modern nations was begun, a period extend- 
ing back, approximately, half a century. Modern Inter- 
national relations between the West and Japan really date 
from the time when her foreign commerce began to de- 
velop, and Its possibilities came to be appreciated by 
Japanese. Commercial reasons, which need not be re- 
viewed here, led to the residence In Japan of foreigners 
in considerable numbers. The presence there of foreign 
colonies and the need of regulation of foreign trade 
caused the promulgation of treaties, which stipulated the 
conditions under which westerners might reside and do 
business. 

The earlier treaties were based upon the principle 
known as " extra-territorlality." Under extra-terrltorlal- 
Ity there was a great development of Japan's domestic and 
foreign trade, and the nation made steady strides along 
the path of modern progress. It would be too much to 
say that in accomplishing this transition the foreigners 
took a predominating part, but It Is certain that they were 
largely responsible for it, and that by example, advice, 
and active assistance they materially contributed to the 
result. This was the period during which the founda- 
tions for the New Japan were laid; and while foreigners 



INVESTMENTS IN JAPAN 115 

could not have constructed it by themselves, it is probable 
that it never would have been built without their presence 
and influence. When Japan felt ready to take her place 
among the nations on equal footing, she petitioned the 
powers to abolish extra-territoriality, which was granted, 
(not without misgiving,) and new treaties substituted. 
The treaties which now define the relations between Japan 
and other nations vary somewhat in minor details, but do 
not, as a rule, depart from the customary formula. By 
consenting to abohtion of extra-territoriality, which they 
could then have continued to impose upon Japan, the 
western nations accepted her assurance that such provi- 
sions were no longer needed to assure to foreigners resid- 
ing in Japan security for person and property and equality 
under the law. In setting Japan completely upon her 
diplomatic feet the United States took a prominent part. 

Consideration of the present legal status of foreigners 
in Japan may be simplified by dividing the subject into 
two general headings — personal rights and property 
rights. 

Broadly speaking, the personal rights of foreign resi- 
dents in Japan are presumed to be the same as are en- 
joyed by foreign residents in western countries. This is 
stipulated by treaties. But a treaty is only a sort of 
international contract, and cannot be directly applied to 
the domestic administration of a nation. In practice it is 
only the law of the land which specifically applies. While 
laws which run directly contrary to the wording or spirit 
of an important treaty are seldom wittingly enacted, it 
Is well known that the actual effects of laws In any country 
must be sought not In their phraseology, but In the way 
they are Interpreted and administered. 

In civilized countries personal rights turn, as a rule, 
upon ordinary conditions of life; liberty as to time and 



ii6 THE FAR EASTERN QUESTION 

place of residence, equality in respect to the conditions 
surrounding and circumscribing existence, business and 
social relations. None of these is a fixed element any- 
where, and in respect to foreigners in Japan there has 
been a constant evolution accompanied by some illumi- 
nating manifestations. In the beginning, foreigners were 
regarded by Japanese as superior persons, worthy of emu- 
lation, and capable of imparting valuable instruction. 
They not only were tolerated, but were for a long time 
regarded as being indispensable to the progress of the 
country. Foreigners assisted in the ' administration of 
government and the revision of laws ; supervised construc- 
tion of railways and the installation of modern conven- 
iences; directed the construction of manufacturing plants 
which were industrially to resuscitate the nation. For- 
eigners formulated the nation's commercial activities 
upon a modern basis, formed a nucleus upon which jfinan- 
cial stability could be built, and through which a bet- 
ter conception of commercial morality might be dissem- 
inated. The foreigner was the avenue through which 
foreign capital, so badly needed to finance the new activi- 
ties, could be introduced. In fact, the foreigner was use- 
ful in a thousand ways. 

But as conditions in Japan have gradually shifted, so- 
have shifted the views of Japanese about foreigners and 
the attitude of the Japanese Government toward them. 
As Japanese learned the methods of westerners and be- 
gan to feel confidence in their own efficiency in modern 
ways of endeavor, they developed a disposition to dis- 
pense with the advice of foreigners, and also to resent their 
presence In Japan to the extent that it results In activities 
which Japanese might otherwise monopolize or Involves 
competition with Japanese industry and commerce. We 
are here concerned not with the justice or injustice of this 



INVESTMENTS IN JAPAN 117 

disposition, but only with the fact, which cannot success- 
fully be disputed. 

That in issues between foreigners and Japanese the for- 
eigners can appear in Japanese courts only at a disadvan- 
tage, especially when the matter involved is too trivial to 
become the subject of diplomatic representations, has long 
ago passed into a proverb among residents of foreign 
colonies in Japan, and is so well recognized that foreign- 
ers will submit to any tolerable injury before they will re- 
sort to the courts. Only in recent years, however, since 
the presence of foreigners has begun to touch the edges 
of Japan's internal industrial situation, and their direction 
of important enterprises has begun to rub the growing 
self-pride of Japanese, has the Government resorted to 
direct and indirect methods to render their situation, un- 
comfortable and unprofitable. To illustrate fully this 
tendency would require elucidation of many laws, and 
hundreds of legal rulings made by Japanese courts, and 
citation of numerous cases in point, space to do which 
here is lacking. While this tendency had been noticed 
and made the subject of much bitter complaint, it did not 
fully develop until after the war against Russia, which 
had the effect of dispelling In the mind of the average 
Japanese all lurking doubt of his ability to cope with the 
westerner on equal terms. Since the war legislation has 
been enacted which has the thinly disguised object of put- 
ting pressure upon foreign residents. The fact is. In my 
opinion, that the only foreigners who are wanted in Japan 
to-day are tourists and sojourners, -whose financial contri- 
butions represent quite an asset to many classes. 

Since much of the discussion about the situation of Jap- 
anese In the United States turns upon that class denomi- 
nated as laborers. It Is interesting to consider a ruling of 
a Japanese court, made before the controversy about Jap- 



ii8 THE FAR EASTERN QUESTION 

anese immigration to the United States and Canada 
arose, which placed a limitation on the treaty clause guar- 
anteeing to foreigners the right to reside and do business 
outside the former foreign settlements, by especially ex- 
cluding artisans and laborers. As a result of this ruling, 
which undoubtedly was made at the instigation of the 
Government, (being based on an Imperial ordinance,) 
a foreign artisan or laborer cannot engage in his occupa- 
tion outside of the former concessions without special per- 
mission from the Minister for Home Affairs, which per- 
mit, if granted, may be revoked at any time. The great 
Japanese shipping lines and commercial houses long ago 
commenced the removal of foreign employes, and are rap- 
idly replacing them with Japanese. The economic reason 
which applies to foreigners of this class (i. e., that Jap- 
anese will work cheaper,) does not equally apply to the 
exclusion of skilled foreign artisans and laborers, for 
whom there now is no substitute in Japan. It seems 
clear, then, that this action of the Government, through 
the courts, was a concession to Japanese labor guilds, 
which at present are animated by a strong anti-foreign 
(they call it patriotic) sentiment. 

The occasion for this ruling was, I believe, the desire 
of a foreign corporation engaged in establishing a manu- 
facturing plant to employ foreign artisans to install 
machinery and other appurtenances, as it had long been 
the custom to do. A Japanese firm which had proposed 
without success to undertake this work invoked the clause 
of a treaty which concedes to each nation the right to con- 
strue its provisions so they shall not interfere with a na- 
tion's police power, or the laws, ordinances and regula- 
tions with regard to trade, or to the immigration of labor- 
ers. Since the policy of the Government to establish all Im- 
portant enterprises in Japanese hands has developed, in 



INVESTMENTS IN JAPAN 119 

many instances foreign firms and foreign-owned corpora- 
tions have been involved in specious litigation with the 
evident purpose, and frequently with the result, of com- 
pelling them to sell to Japanese purchasers. 

It may be pointed out, in this connection, that, after 
all, these matters are but pin-pricks; that a government 
should be permitted to regulate its Internal affairs, and that 
If foreigners in Japan fret under the conditions which cir- 
cumscribe their residence there they always have an al- 
ternative, If not a remedy, by moving elsewhere. As a 
general rule this is perfectly true, although many seem 
to have overlooked Its bearing upon Japanese in the 
United States. But some aspects of the status of foreign 
property rights in Japan and in regions now controlled by 
Japan have a wider bearing, and cannot thus be dismissed. 

In civilized countries the conditions under which prop- 
erty may be acquired and held are the basis for indus- 
trial and commercial activity and general prosperity; 
so It followed, naturally, that In making It difficult for 
foreigners to secure a stable foothold In Japan, the Gov- 
ernment chose this medium. I have before me a treatise 
and digest of Japanese legal codes, and the western pro- 
totypes (chiefly German) from which they were de- 
rived, but It Is not necessary specifically to examine them 
here. Formerly a foreigner could not acquire real 
property In Japan, except within the limits of the foreign 
settlements. The Government soon learned, however, 
that the much-desired foreign capital would not enter the 
country under these circumstances, and so the law was 
modified by creating a legal fiction known In Japan as 
a juridical person. Put understandlngly to the lay mind, 
this juridical person must be a Japanese, In whom actual 
title to any real property owned by a foreign Individual or 
corporation Is vested. When this law was promulgated an 



120 THE FAR EASTERN QUESTION 

attempt, (passably successful,) to reassure foreign, in- 
vestors was made by representing that this was merely 
a way of getting around an ancient Imperial law which 
forbids alienation of the national domain, and that prop- 
erty can be securely held under such a title. 

It formerly was also impossible for a foreigner to take 
a valid lease upon real property, and here again an equivo- 
cation, or what practically amounts to one, was resorted 
to by the creation of a right in land called superficies. 
Superficies, as a right in land, is, I believe, unfamiliar to 
British and American jurisprudence, although In some of 
our older States there exists a partial equivalent In a sort 
of ground rent. As outlined by Japanese law, superficies 
is a form of leasehold of vague and uncertain character 
whose intricacies, if examined in full, would only cloud 
this discussion. Its chief defect seems to be that the exist- 
ence. In reversion, of a right of escheat vested In the Gov- 
ernment, makes tenure uncertain and almost amounts to a 
definite cloud upon title. Several cases Involving this 
superficies in which foreigners are implicated have been 
dragging along In Japanese courts for years, with little 
prospect of a satisfactory (to the foreigners) settlement. 
A foreign authority on Japanese law who has long resided 
in Japan told me recently that in his opinion superficies Is 
not legally sound, from the standpoint of the foreigner, 
either as security or Investment. On the face of the 
statutes the title Involved In the juridical person seems 
more secure, and It at present represents the better legal 
basis for foreign Investments and property rights In Japan. 
But It Is by no means satisfactory to foreigners there, who 
find it necessary to place their Interests to some extent at 
the mercy of Japanese. Cases Involving the use of the 
juridical person when foreigners either have lost their 



INVESTMENTS IN JAPAN 121 

property or been put to great expense and vexatious litiga- 
tion to secure it might be cited by hundreds. 

Several years ago John Schroeder, a foreigner who has 
long resided in Japan and is happily married to a Japa- 
nese lady, and who has studied the economic situation of 
the country, was requested by a European economic jour- 
nal to define the status of foreign investments there. He 
sum.med up the conditions and questions involved as fol- 
lows: 

" The points, then, where the basis for foreign invest- 
ments in Japan is defective, or insecure, are : 

" I. The reversal of the common order of things in 
all matters of labor, in that the demand for skilled labor 
is always far in excess of the absolutely insufficient supply. 

" 2. The absence of laws regulating the relations be- 
tween masters and servants, and the absence of courts in 
which disputes and differences between masters and serv- 
ants can be quickly and cheaply settled. 

" 3. The impossibility of filling the deficiency in the 
supply of Japanese skilled labor with competent foreign 
labor, on account of regulations hampering the introduc- 
tion of foreigners, and the exorbitant cost of living for 
foreigners in Japan, who are surrounded by rings of Jap- 
anese dealers in league with Japanese servants to defraud 
their employers. And when the new tariff [this was writ- 
ten before Oct. i, 1906] comes into effect the cost of liv- 
ing for foreigners will be further enhanced from 40 to 
50 per cent., as the heaviest increases are upon articles 
principally consumed by foreigners. Everything seems 
to point to the fact that Japanese policy is directed to- 
ward closing the country to foreigners so far at least as 
permanent residence Is concerned, by creating a condition 



122 THE FAR EASTERN QUESTION 

which will make it unprofitable for foreigners to live and 
carry on business in Japan. This is the opinion of for- 
eign merchants with whom I have spoken on the subject, 
and it is my own opinion. As things now are, there are 
few foreigners who do not regret that they ever came to 
Japan to reside. 

" 4. The fact that foreigners may not purchase and 
own real estate in Japan, except such lots of land in the 
small former foreign settlements which are held under 
the old title deeds, so that no permanent enterprises to 
which the ownership of real estate is essential or indis- 
pensable can safely be undertaken by foreigners in Japan. 

" 5. The defects in the legal codes, and the still 
greater defects in the administration of the codes by the 
Japanese courts, which tend to make business in many 
cases an unqualified risk, so that many foreign merchants 
refuse now to enter into new lines of business and to 
accept new connections." 

Personal investigation in Japan has convinced me 
that the views of this writer, who is well known and re- 
spected, are those of the major part of the foreign busi- 
ness community, although under existing conditions most 
foreign residents hesitate to express them publicly. Some 
tolerant critics of Japanese character attribute the dis- 
position of Japanese courts to lean toward the interests of 
their own nationals In litigation between them and for- 
eigners to unconscious rather than calculated partiality, 
and as based upon traditions of Oriental jurisprudence 
which the West does not fully understand or appreciate. 
This charitable view does not, however, alter effects upon 
foreigners who are compelled to seek justice in Japanese 
courts, either In regard to personal or property matters. 



INVESTMENTS IN JAPAN 123- 

Japan is still far from the stage when her torch of civiliza- 
tion can enlighten the world. 

In view of the general attitude of the Japanese Gov- 
ernment and people toward foreigners who reside there, 
and toward foreign investments in Japan, the optimism 
with which some phases of the new national activities 
were advanced causes astonishment. Especially is this 
true of Japan's effort to induce the extensive investment 
there of foreign capital. The method by which the Gov- 
ernment stalks the foreign investor operates, as do so many 
of Japan's new activities, through the banks. It is usu- 
ally som^ething like this: a stock company will be organ- 
ized, its stock duly subscribed for, and part of the capital 
paid in. Then bonds will be issued, and placed, if the 
Government is supporting the enterprise, with the Nippon 
Ginko or one of the other Japanese banks which have 
branches and agencies throughout the world, to be pre- 
sented to foreign investors. The Japanese bank will not 
do this directly. It will split up the bonds in portions 
to be distributed in various countries, as the financial and 
political situation seems to warrant, and allot the portions 
to agents or correspondents of the Japanese banks in 
those countries. For instance, the bonds of an electric 
lighting and power company with a charter to conduct 
business in Japan, or of a concern holding a mining con- 
cession in Korea or Manchuria, may be sent to a bank- 
ing house in Wall street, which is the correspondent, let us 
say, of the Nippon Ginko. These bonds, by means of 
the customary process, will be offered by the American 
bank or house to its customers through its regular chan- 
nels, with the statement that the Japanese Government 
guarantees interest on the bonds. To the average inves- 
tor in such securities this probably will be considered 



124 THE FAR EASTERN QUESTION 

satisfactory, and he may put his surplus funds, if a bet- 
ter investment does not just then offer, into the bonds. 
This money goes to Japan, less the commission of the 
American concern (usually very liberal. In the case of 
some of the Japanese foreign loans it netted nearly three 
per cent.), and there helps to finance the new national sys- 
tem. 

Foreign investors in such securities may figure that 
even if the enterprise, of which they probably know noth- 
ing, should fail to make money their interest is assured; 
and under ordinary circumstances this would be true, since 
governments nowadays habitually meet their obligations. 
But clearly here is a different condition. The Japanese 
Government is going into this thing on a large scale; 
which means that it is really taking the same chance as 
the foreign investor in the success or failure of the en- 
terprise. If the Japanese Government had unlimited 
financial resources it might not be seriously affected by 
any miscarriage of its scheme. Under its present fiscal 
circumstances, it is possible that if the new system fails 
the finances of the Japanese Government will go down 
with it. 

In this connection the status of foreign investments In 
Japan becomes pertinent, for if enterprises in which for- 
eign capital is invested cannot be operated at a profit and 
consequently fail, the only security for the capital will be 
whatever property may be owned by the corporation. 
Assuming that such a company fails, this question will 
arise in cases where the Interest on Its bonded debt Is 
guaranteed by the Government: Is the Government, after 
the company has gone Into bankruptcy and ceased to 
operate, obligated tO' continue to pay the Interest on the 
bonds of an extinct enterprise? I put this question to a 
foreign lawyer In Japan, of many years' experience In 



INVESTMENTS IN JAPAN 125 

practice there, and he decHned to express a definite opin- 
ion on the legal point involved, but he said : 

" In the long run it would depend on what kind of a 
settlement the investors could make with the Govern- 
ment." 

To put it flatly, the attitude of Japan toward the for- 
eign investor whom she hopes to induce to financially 
support her new economic system amounts to this: 
" We want your money, but you must absolutely trust it 
to us." The present disposition of the Japanese Govern- 
ment toward- foreigners, as exemplified by their legal 
status in Japan, hardly justifies foreign investors in accept- 
ing this condition. 

Examination of Japan's Industrial situation reveals that 
it is entirely founded upon western forms, and that It is 
still largely dependent upon western ideas for vitality. 
This Is particularly noticeable In respect to her export 
trade, of which the United States takes 30 per cent., our 
country being Japan's best customer. While the use of 
Japanese curios Is extensive In America, and gives a su- 
perficial Impression that they are an important Item of 
export, such articles really are unimportant in comparison 
with Japan's staple exports upon which her new trade 
expansion Is founded. Articles made In Japan which 
have a large and steady sale abroad are chiefly utilitarian, 
and in manufacturing them western habits and taste must 
be considered. Many factories in Japan depend entirely 
upon foreign consumption. Speaking to me recently 
about this phase of Japan's development, an American 
who has had twenty years' experience as an Importer of 
Japanese products, and who makes an annual visit there, 
said: 

" I notice among Japanese commercial classes a grow- 
ing disposition to assume that they can now dispense with 



126 THE FAR EASTERN QUESTION 

western advice and ideas. This is a very short-sighted 
view. Take the products which I import to America. 
None of them is in any way necessary to my customers. 
We have taught them to buy them by cultivating a taste 
for them, and by inducing Japanese manufacturers to 
follow our ideas and designs. Indeed, I may say that 
many important articles of export from Japan have sprung 
entirely from the brains of foreigners. Japanese them- 
selves would never have thought of doing half the things 
which now constitute their modern industrial system, and 
where they are in error is in assuming that in the future 
they can dispense with western brains. I brought over 
this time more than fifty new designs and ideas to be put 
into effect here, and to the extent that they become popu- 
lar they will make for Japanese trade. Most Japanese 
goods which we sell are articles which we have thought of 
and induced them to make. Unless we continue to push 
these articles our customers will substitute others. For 
twenty-five years western commercial and industrial ideas 
have been flowing into Japan and contributing to the stim- 
ulation of her industry. A trouble with Japanese to-day 
is that they now assume that they have done all this them- 
selves, and do not seem to realize that if, for any reason, 
this injection of western ideas should stop it will mean the 
deterioration of Japanese trade and industry. Indus- 
trially, Japan has contributed practically nothing to the 
West, while the West has given freely to her of its best 
ideas and knowledge, and will continue to do so unless 
they are rejected. I believe that if it was possible to 
again isolate Japan, and entirely cut her off from contact 
with the West and western ideas, fifty years from now 
would find the nation back where it was fifty years ago." 
It may be that this American has an exaggerated view 
of the part which the West has played in creating the 



INVESTMENTS IN JAPAN 127 

Japan of to-day, and underestimates the Initiative qualities 
of Japanese, but many westerners who have long resided 
in Japan hold similar views, especially those who have 
devoted time to studying the industrial aptitude and meth- 
ods of the people. Comprehension of her real relations 
to the West may In time be restored in Japan, and perhaps 
Improvement of the situation of foreigners there will be 
among its results. In estimating some matters Japanese 
are a bit out of perspective just now. 



CHAPTER XI 

THE SUBJUGATION OF KOREA 

Establishment of Japan's Suzerainty — Administra- 
tive Reorganization of Korea — Japanese "Advisers" — 
Creation of the Residency — Marquis Ito's Position — 
Struggle Between the Military and Civil Factions — 
Deposition of the Emperor — Final Extinction of Korean 
Autonomy — Disbanding the Korean Army — Japanese 
Attempts at Reform — Practical Effects of Japa- 
nese Reforms — Situation of the Koreans — Their 
Distress Under Japanese Rule — Japanese Immigra- 
tion — Attempts to Jap-ize Korea — Exploitation of 
the Country — The Insurrection — A Hopeless Strug- 
gle — Position of the Korean Court — The Emperor a 
Prisoner — Christian Missionaries in Korea — A Deplor- 
able Situation. 

It is no longer possible to describe Korea correctly, in 
a political sense, as a nation. And, although the country 
is governed by Japanese, it is not a part of Japan. Polit- 
ically, Korea is a vassal, stripped of the last vestige of 
administrative autonomy, and without a voice in directing 
even the more trivial of her internal affairs. It is, there- 
fore, interesting to ascertain the conditions under which 
ten millions of Koreans, who five years ago constituted 
an independent Empire with a government and a civiliza- 
tion thousands of years old, and which had diplomatic 
relations with all the greater nations of the world, are 
now living. 

It is not always possible, especially in the East, to 

128 




< 



THE SUBJUGATION OF KOREA 129 

judge the administration of a country by its governmental 
forms; but these forms provide a basis for comparison. 
The series of so-called " agreements," signed by the Em- 
peror under Japanese coercion in 1904 and 1905, by 
which the substantial suzerainty of Japan was interna- 
tionally established (it had already been actually estab- 
lished by military occupation) need not be reviewed.^ 
They formed the basis for administrative reorganization 
of Korea under Japanese direction. The Emperor re- 
mained titular head of the State, presumably assisted by 
a ministry composed of Koreans. The interests of Japan 
are cared for by a Resident General, with the usual ad- 
ministrative departments of foreign affairs, finance, rev- 
enue, justice, posts and telegraphs, etc. Each member 
of the Korean cabinet Is compelled to employ a Japa- 
nese " adviser," with whom he Is expected to consult 
in regard to administrative matters. Until the summer 
of 1907 some outward remnants of Korean authority 
were permitted to exist, although they could exercise no 
initiative. Among these was the Korean army of 6,000 
to 8,000 troops, and the palace guards. However, even 
before the final extinction of Korean autonomy in July, 
1907, the Emperor was kept secluded In his palace, and 
his ministers were under constant Japanese military sur- 
veillance. 

Under this arrangement Japanese, during the years 
1905—8, took over all branches of the central government. 
Feeling that her administration of Korea would be 
keenly watched by the world, Japan Induced Prince Ito 
to accept the place of Resident General at Seoul. It prob- 
ably was felt in Japan that Ito then enjoyed a greater repu- 

^An account of the seizure of Korea by Japan, in 1904, is given 
in the author's The New Far East. 



I30 THE FAR EASTERN QUESTION 

tation in the West than any other Japanese, and that 
his name would carry weight. 

Ito's assignment to Korea, which was hailed in many 
quarters as a guarantee of a wise and humane administra- 
tion, soon developed a schism in the Japanese party there. 
When Ito came the military was in full control and, as 
invariably is the case in such circumstances, was reluctant 
to yield its authority to a civil government. A less force- 
ful man than Ito would have been bent to the military 
yoke, but he quickly forced an issue and informed the 
Tokyo Government that he would remain in Korea only 
with understanding that he have full authority. Al- 
though compelled outwardly to take a subordinate position 
in the Government, the military party was not defeated, 
but has remained a power which Ito has been able to 
restrain but not entirely to control. Among Japanese 
in Korea there are, then, two factions — civil and mih- 
tary; and of these the military is by far the more numer- 
ous and influential, although the civil party nominally 
directs the administration of affairs. Prince Ito is absent 
in Japan much of his time, and even when in Korea can- 
not be fully cognizant of conditions throughout the 
country, or of minor administrative details, and there is 
no doubt that much goes on about which he is ignorant 
or only partially Informed. 

This was the general situation when Japan seized the 
opportunity afforded by the appearance of the Korean 
delegation at the Hague conference In 1907, to take a 
step which had been contemplated for some time — the 
deposition of the Emperor. The Emperor, (he Is now 
officially called the Retired Emperor,) is bitterly hostile 
to Japanese occupation and was constantly trying to de- 
vise ways to regain his kingdom. Japan probably feels 
that she cannot yet dispense with some kind of an Imperial 



THE SUBJUGATION OF KOREA 131 

figurehead In Korea, but she was glad of a chance to re- 
place the old Emperor by a more tractable man. Such a 
one was ready to hand in the Crown Prince, who is little 
more than an idiot about most matters, and who is utterly 
without strength of character or wit to resist Japanese dom- 
ination. 

On July 16, 1907, the Korean cabinet, acting under 
Instructions from the Resident General, waited upon the 
Emperor and proposed to him the alternatives of abdica- 
tion in favor of the Crown Prince or agreeing to the fol- 
lowing stipulations: 

(a) That he sign with his own seal the suzerainty 
agreement of November 17, 1905. 

(b) That he agree to the appointment of a regent. 

(c) That he proceed to Tokyo and personally apolo- 
gize to the Emperor of Japan. 

The two latter clauses are self-explanatory, but the first 
may require some elucidation. After Japan had an- 
nounced to the world the so-called agreement ^ of Novem- 
ber 17, 1905, by which Korea recognized the suzerainty 
of Japan, the Korean Emperor- managed to elude the 
vigilance of his Japanese guards and published a state- 
ment In which he denied having signed this agreement, 
and called attention to the fact that the document did not 
contain his seal. The first stipulation meant, therefore, 
that Japan required the Emperor formally to seal and 
ratify the agreement which he had repudiated. Of 
course, whether he acceded or not could not alter the 
status quo, for Japan was exercising sovereignty any- 
how. The stipulation that he proceed to Japan fright- 
ened the Emperor very much, as he, whether rightly or 
not one can hardly determine, believed that he would be 

2 Appendix I. 



I3Z THE FAR EASTERN QUESTION 

detained there as a prisoner. He is a prisoner in Korea, 
but he shrank from the prospect of exile. 

The Emperor refused to accede to the stipulations 
without having time for consideration, and the ministers 
left without obtaining an answer to Japan's demand. 
That night the Emperor sent word to E. H. Bethell, 
editor of the Korean Daily News, informing him of the 
situation and asking that news of his predicament be 
published, which was done in both the English and ver- 
nacular editions of this paper on the following day. As 
soon as the news was disseminated among the people a 
large crowd assembled near the palace for the purpose, 
in accord with an ancient Korean custom, of petitioning 
the Emperor to not agree to the stipulations. The crowd 
was orderly, and it was dispersed by Japanese soldiers 
without a disturbance. Meanwhile, further pressure had 
been put upon the Emperor, and on July 1 8 he appointed 
the Crown Prince to be Regent. When this was an- 
nounced to the people another crowd assembled outside 
the palace. An attempt by Japanese troops to disperse 
it led to rioting, during which a number of Japanese and 
Koreans were killed and wounded. The people finally 
were dispersed and the streets cleared. 

For several days the resentment of the Koreans smoul- 
dered, but there were no further popular demonstrations. 
It was supposed by Koreans that the regency was only 
temporary, and that the Emperor would resume the 
throne. On July 23 a new agreement defining the rela- 
tions between Japan and Korea was signed by Prince 
Ito and Yi Wan Yong, the Korean prime minister, who 
acted for the Regent. As this document affords a clue 
to certain methods of Japanese administration, I give it 
here in full: 



THE SUBJUGATION OF KOREA 133 

Article I — The Government of Korea shall follow 
the direction of the Resident General in connection with 
the reform of the administration. 

Article 2 — The Government of Korea shall not en- 
act any law or ordinance, or carry out any important 
administrative measure unless with the previous approval 
of the Resident General. 

Article 3 — The judicial affairs of Korea shall be kept 
distinct from the ordinary administrative matters. 

Article 4 — No appointments or dismissals of Korean 
officials of the higher grade shall be made without the 
consent of the Resident General. 

Article 5 — The Government of Korea shall appoint 
to official positions under it such Japanese as may be 
recommended by the Resident General. 

Article 6 — The Government of Korea shall not en- 
gage any foreigner without the consent of the Resident 
General. 

Article 7 — The first clause of the agreement between 
Japan and Korea signed on the 22nd day of the 8th month 
of the 37th year of Meiji is herewith abrogated. 

By this agreement the Korean Government Is reduced 
to a position where it cannot enact any law however trivial, 
cannot appoint or dismiss any official, cannot put into 
execution or suspend any administrative measure, and 
shall appoint all Japanese officials recommended by the 
Japanese Resident General; in other words, it can no 
longer exercise any of the functions of a government. 
Simultaneously with the promulgation of this agreement, 
the Resident General compelled the Emperor to sign a 
revised abdication, making it final and absolute, thus 
making the Crown Prince Emperor. 

When news of the deposition of the Emperor spread 



134 THE FAR EASTERN QUESTION 

through the country it greatly excited the people, and 
an insurrectionary movement sprang up in the provinces, 
which was fanned by the action of the Japanese in dis- 
banding the Korean army. Japanese allege that they 
had information of a plot in the Korean army to 
revolt and restore the retired Emperor to the throne. 
There seems to be no tangible proof of such a plot, al- 
though there is no doubt that the army was dissatisfied, 
as nearly all Koreans are, with Japanese rule; but the 
Residency decided upon drastic action. At 6 o'clock on 
the morning of August i, 1907, an order from the 
Residency and approved by the new Emperor, was pre- 
sented to the commanders of the four Korean barracks 
at Seoul. This order instructed the officers to parade 
their troops without arms and read to them an order of 
dismissal. There had been no previous intimation of 
such an intention, except rumors, and the order came as a 
surprise to the Korean officers and men. In fact, this 
action of the Japanese was brutal and tactless. The Ko- 
rean army undoubtedly contained many wretched speci- 
mens of humanity, but it also contained thousands of hon- 
est men, who might at least have been paraded with their 
arms and thanked for their services, as is usual under 
such circumstances, before being disbanded. At all bar- 
racks except one the order was quietly obeyed. Hard- 
ly had the Korean regiments broken ranks when detach- 
ments of Japanese troops, which were stationed outside, 
entered, occupied the barracks and took charge of the 
arms and equipment. 

At the West Gate barracks a striking scene occurred. 
The Colonel paraded his troops as ordered and read to 
them their dismissal. He then advised the troops to dis- 
band, saying there was nothing to do but submit, retired 
to his quarters and fell upon his sword. The news of 



THE SUBJUGATION OF KOREA 135 

his suicide quickly spread, and some soldiers seized their 
arms and began firing at a detachment of Japanese troops 
which was preparing to occupy the barracks. Others 
joined the rebels, and the firing became general. Jap- 
anese troops were hurried to the scene, and a heavy fire 
from rifles and machine guns was poured into the bar- 
racks. As the Japanese had for some time kept the 
Korean troops on a short allowance of ammunition, this 
was soon expended and the rebels were left without means 
of resistance. A majority of them abandoned the fight 
and attempted to escape, which many succeeded in doing. 
Some continued to fight until the Japanese troops had 
penetrated the barracks and entirely surrounded them, 
when they were shot down. Eventually hundreds of ex- 
soldiers made their way Into the country and joined the 
" volunteers," as the insurgents are called, thus giving the 
movement fresh vitality. 

In pro-Japanese reports about the situation In Korea it 
is almost invariably represented that hostility to Japanese 
rule (it is usually called "reform") springs from and 
is Incited by corrupt Korean officials who find their 
" graft " abolished under the new regime. Quite the 
contrary Is true. A majority of corrupt Korean offi- 
cials have been provided for by the Japanese. Many of 
them retain high office, drawing the emoluments but not 
performing the duties of their positions, and those who 
could not be quieted by this method have been de- 
ported. Imprisoned or executed. Since the alternative to 
bending to Japanese power Is exile or penury, or both, the 
mass of corrupt Korean officials have accepted the inevita- 
ble and obey the orders of their new overlords. The In- 
surrection which began in 1907 sprung entirely from the 
people, the very class In whose Interest the so-called Jap- 
anese reforms are presumed to be administered. Why the 



136 THE FAR EASTERN QUESTION 

Korean people, who bore almost without murmuring the 
exactions of their own officials and Government, have 
taken up arms in their feeble way against the Japanese is 
worth inquiring into. 

It may be granted that, in a general way, the Japanese 
are gradually improving the structural form of the Korean 
Government, and modernizing Its administrative method. 
In a pamphlet entitled " Administrative Reforms In Ko- 
rea," recently issued by the Residency, its aim is stated to 
" give a general idea of the kind of assistance the Gov- 
ernment of Japan is extending to Korea in carrying out 
administrative reforms in that country." Japanese re- 
forms In Korea are, in this report, summarized under the 
following heads: 

1. Reconstruction of roads. 

2. Waterworks undertakings. 

3. Extension of educational system. 

4. Hospitals. 

5. Reorganization of police system. 

6. Purification of the Imperial Court. 

7. Reforms of local administrations. 

8. Reforms of the judiciary. 

9. Financial reforms. 

10. Codification of laws. 

11. Reform of mining administration. 

12. Protection of emigrants. 

13. Encouragement of productive Industries. 

This is quite an imposing list, and all the matters con- 
tained in it are, stated In general terms, presumed to be 
beneficial. Such matters cannot, however, be judged by 
their pretensions, but by their results. Many of these 
" reforms" are merely business enterprises, such as water 
works and other utilities, which are expected to pay divi- 



THE SUBJUGATION OF KOREA 137 

dends to Japanese shareholders, although they will, if 
properly operated, be of public benefit. Fully half of the 
so-called reforms instituted under the Japanese regime be- 
long in this category, being a part of the application here 
of Japan's system of exploitation, and would hardly be 
termed administrative matters in most countries. Such af- 
fairs as education, finance, police and justice lie wholly 
within the province of governmental administration, and 
Japan has tried her hand at revising all of them here. 
So far, reform in education chiefly consists In replacing 
Korean and European teachers with Japanese, and the 
partial substitution of the Japanese language for the Ko- 
rean and Chinese formerly used. It may be that In time 
this will work out beneficially, but its immediate effect has 
been to impair the standard of efficiency in teaching and 
to anger the Koreans, many of whom have withdrawn 
their children from the schools. The police system has 
been reorganized by creating a gendarmerie composed ex- 
clusively of Japanese, which is distributed throughout the 
country, replacing the former Korean constabulary. 

A reform to which Japan points with pride is her re- 
vision of the judicial system. It Is announced that the 
revenue saved by disbanding the Korean army will be 
devoted to Improving the administration of justice. A 
Court of Cassation has been created, with a Japanese 
judge, and In time Japanese judges will act In the Inferior 
courts. The codes will be revised and put upon a 
modern basis. This Is commendable enough, but Jap- 
an's haste In this matter springs from a desire to gain 
the consent of the powers to the abolition of extra- 
territoriality. Meanwhile, there Is no perceptible Im- 
provement of administration of justice; in fact, the Ko- 
reans are probably worse off than they were under their 
own corrupt and inefficient government. The country Is 



138 THE FAR EASTERN QUESTION 

divided by the Japanese into sub-residencies, administered 
by vice-residents, who supersede the Korean governors 
just as the Resident General superseded the Emperor. In 
each district the resident is supported by Japanese troops 
and gendarmes. The inferior courts are still presided 
over by Korean magistrates, but a Japanese usually sits 
with veto jurisdiction. Practically, this system places the 
lives and property of Koreans entirely at the disposal of 
Japanese. 

In many branches of administration this system has re- 
sulted in a dual authority. Where the Korean used to 
have to bribe one petty official he now has to bribe two, 
and so on up the line ; for corruption in Japanese adminis- 
tration extends to the door of the Residency, is even be- 
lieved to have penetrated the inner circle which immedi- 
ately surrounds the Resident General. So far as I could 
learn, the probity of Prince Ito is not questioned; but 
it is known that his chief advisers keep him in the dark 
about much that transpires, and mislead him in many mat- 
ters. On the whole, the character of inferior Japanese 
officials in Korea is even lower than in Japan, and while 
at home their venality is circumscribed, here it finds ample 
opportunity. That Japan intends to in time substantially 
exclude Koreans from official life in Korea is evident. 
There are now nearly 5,000 Japanese in the employ of the 
Korean Government. The Japanese are making a clean 
sweep of all the offices high and low. Even Korean 
coolies who were employed to build fires and sweep out the 
palaces and government buildings are being replaced by 
Japanese coolies. No position is too mean to be beneath 
the desire of some Japanese immigrant. In Seoul some 
Koreans are still employed as police, but only Japanese 
police are permitted to carry firearms, and the number of 
Koreans is constantly being reduced. At the present ratio 




Branch at Seoul of the D'ai Icho Ginko (now Bank of Korea). 




Street in the Japanese Quarter of Seoul. 



THE SUBJUGATION OF KOREA 139 

of increase, by the end of 1909 there will be more Japanese 
officials on the payroll of the Korean Government than 
were Koreans when Japan occupied the country, for it not 
only is Japan's policy to replace Koreans by Japanese, but 
to make as many new positions as the revenue will bear. 

A calculated attempt is being made to convey an impres- 
sion that Japan is " assisting " the Korean Government 
to reform itself at her (Japan's) expense. This is not 
true. The expenses of the Korean Government, including 
" reforms " instituted by Japanese, are borne by the Ko- 
rean treasury, which is administered, of course, by Jap- 
anese. Already taxation has been raised, and measures 
for further increasing it are being considered. It is 
claimed by the Residency that most of the increase in rev- 
enue, as shown by the budget, is the result of economical 
process of collection and the elimination of " squeeze " 
which formerly went into the pockets of Korean officials. 
I think It is true that most of the " squeeze " has been 
eliminated in collecting revenue, but this has not resulted, 
as Japanese apparently wish to convey, in lightening the 
burdenjupon the people. On the contrary, there is much 
evidence to shbwjhat it has considerably added to this bur- 
den. The new Japanese officials, like the Koreans, are 
poorly paid, and having now to pass practically all the 
taxes on to those higher up, Instead of being able to reserve 
a proportion for themselves, as formerly, compels them to 
exact their portion from the taxpayer by other means. 

In the field of finance, the Japanese substituted the yen 
for the old Korean dollar, which Is a desirable change and 
has resulted In giving the country a stable circulating me^ 
dium. Notes of one yen and upward are Issued by the 
Dai Icho GInko (now the Bank of Korea), and are sup- 
posed to be backed by a specie reserve held In Japan. The 
subsidiary coinage also is minted In Japan, and represents 



140 THE FAR EASTERN QUESTION 

a profit In the coinage of about 40 per cent. Whether 
this profit is credited to the treasury of the Korean Gov- 
ernment or goes to the Bank of Korea is not generally 
known. As the Korean Government (that is Japan) has 
needed more money to carry on the work of reform it has 
borrowed (from Japan) through the Bank of Korea. The 
expenditure of the money thus secured cannot be definitely 
traced by one outside the inner circle of the Residency, but 
It appears that most of it has been used upon works re- 
quired by the Japanese; while Korean and other contrac- 
tors have practically been excluded from public contracts 
which, by thus ehmlnating competition, have provided 
good profits for Japanese contractors. When the Japan- 
ese took the country Korea was out of debt, and Sir Mac- 
Leavy Brown, then Inspector General of Korean customs, 
told me. In 1905, that he thought the country could easily 
support an efficient government without Increasing taxa- 
tion. The Japanese already have begun to put the country 
Into debt, and If the present policy Is pursued there can 
be little doubt that within a decade the Koreans will be 
supporting as heavy a burden of debt and taxation as the 
people of Japan are now'. 

The scope of this work will not permit relation In de- 
tail of detriments which Koreans of all classes suffer 
under the Japanese regime. Bare mention of specific in- 
stances which, supported by. reliable testimony, were called 
to my attention during my last visit would fill pages. 
These detriments may be summarized as follows: seizure 
of land and other property of Koreans by Japanese with- 
out proper compensation or legal warrant; exclusion of 
Koreans from participation in commercial and indus- 
trial development of the country; subjection of Koreans to 
abuse and Indignities at the hands of Japanese immigrants, 
military and civil officials; the practical impossibility for 



THE SUBJUGATION OF KOREA 141 

Koreans, except in flagrant cases, to obtain justice in issues 
against Japanese; superior advantages of Japanese over 
Korean tradesmen and merchants, through preferential 
treatment accorded by the Japanese administration; de- 
bauching of Korean morals by Japanese immigrants, by 
the introduction of thousands of Japanese prostitutes and 
by the introduction of pernicious vices, such as opium and 
lotteries. The detriments thus summarized are not based 
upon scarce or isolated cases, but are so numerous and 
widespread as unmistakably to indicate that they are the 
result partly of premicditated general policy, and partly 
due to laxity and indifference of Japanese administrators. 
As a single greater instance of Japan's policy in Ko- 
rea may be cited the Oriental Colonization Company, 
which recently has been granted a charter by the Japanese 
Government. This corporation has a capital of Yen 
10,000,000.00, and is authorized to issue debentures up 
to Yen 100,000,000,00. To aid the company to secure 
capital, the Government Is to grant for eight years an 
annual subsidy of Yen 300,000.00 to secure interest upon 
the investment. Thus launched with active governmental 
support, this concern is provided with a blanket charter 
under which It may engage in almost all kinds of business 
in Korea: commercial, banking, agriculture, marine indus- 
tries, mining, manufacturing, purchase and leasing of 
land, etc. A primary object of the corporation is to col- 
onize Korea with Japanese. Certain fundamental provi- 
sions of the charter are aptly illustrative of Japan's activ- 
ities In Korea. The company is to be composed exclusive- 
ly of Japanese and Koreans. The president 7niist be a 
Japanese; of the two vice presidents one may be a Korean; 
and two-thirds of all managers and employes must be Jap- 
anese. The president and one vice-president must be ap- 
pointed by the Japanese Government, and the other vice 



142 THE FAR EASTERN QUESTION 

president may be appointed by the Korean Government 
(which is Japan). Thus even in Japan's exploitation of 
Korea is the fiction of Korean participation outwardly 
preserved; and a way provided by which Koreans who 
consent to serve Japan, and whom Japan considers it politic 
to placate, can be given lucrative appointments. 

Here is a plan to Jap-ize Korea on a grand scale, and it 
will be supported by all the ramifications of Japan's gov- 
ernmental process, including her shipping lines and rail- 
ways. The scheme looks on the surface like a disguised 
revival of the Nagamori land project,^ which the Indigna- 
tion of Koreans caused the Japanese to abandon In 1905, 
It is proposed to develop unoccupied lands in Korea 
by the Introduction there of Japanese farmers, and also 
to purchase Improved agricultural lands for occupation 
by Japanese settlers. On Its face it appears that such 
a corporation as the Oriental Colonization Company 
might be of great help In developing agriculture in Ko- 
rea, but friends of the Koreans fear that its practical op- 
eration may result in great hardship to the poorer class of 
Korean land owners by eventually causing them to lose 
their farms without adequate compensation. 

This fear Is not chimerical. Since the Japanese occu- 
pation many petty Japanese private banks have begun to 
operate in Korea, whose chief business is to lend upon real 
property at usurious interest, often as high as three per 
cent, a month. Few Koreans have much business acumen, 
and the average Korean readily will borrow to meet 
needs or fancies of the moment; with a result that thou- 
sands of them already are in the grasp of Japanese money 
lenders. Koreans have been used to lax business methods, 
and usually expect to be able to renew their notes until 
prepared to liquidate them; but the policy of Japanese 

3 This project is described in the author's The New Far East. 



THE SUBJUGATION OF KOREA 143 

has in many cases been, especially when a desirable piece 
of property is involved, promptly to foreclose. In this 
way thousands of Koreans, particularly away from the 
cities and larger towns, have lost their farms and often 
their personal property as well. This often is caused by 
ignorance and lack of foresight; but such knowledge and 
foresight does not now generally exist among Koreans, who 
fall easy prey to unscrupulous money lenders, especially 
when the latter are indirectly supported by the Japanese 
administration. The operation of the Oriental Coloniza- 
tion Company will, therefore, be watched with some anx- 
iety by friends of the Korean people. Japan now hardly 
takes the trouble to disguise her intention to convert Ko- 
rea into a Japanese colony; indeed, a prominent Japanese 
official recently made a comparison between the Koreans 
and the Ainu aborigines of Japan, intimating that the na- 
tive population of Korea may have to make way for the 
superior Japanese. Since Korea offers no special attrac- 
tions even to Japanese immigrants under ordinary condi- 
tions, and they cannot be induced to come in large num- 
bers except by promises of betterment, the Oriental Col- 
onization Company will be compelled to establish condi- 
tions favorable to Japanese colonists, and with conditions 
in Korea as they are It is not apparent how this can be 
done except by making the situation of Koreans relatively 
inferior. 

That the situation of Koreans In their native land to- 
day Is comparatively Inferior to that of Japanese cannot be 
doubted by any Investigator who escapes from the leading 
strings of the Residency and opens his mind to the re- 
verse of the picture. I cannot think of a better Illustra- 
tion of this general condition than that which Is afforded 
by a daily scene at the railway station In Seoul. Just 
outside the station Is a stand for 'ricksha coolies. The 



144 THE FAR EASTERN QUESTION 

observer whose eyes are open to such evidences could note, 
when I was last in Seoul, that only Japanese 'ricksha cool- 
ies occupied this convenient stand. Some distance off, 
across a space which is either very dusty or muddy as the 
case may be, is another line of 'ricksha coolies, all Koreans. 
The Korean coolies are not permitted to come nearer, and 
to get a fare they must either wait until all the Japanese 
'rickshas are taken or depend upon persons who will take 
the trouble to cross over to them. The fact that this petty 
discrimination does not, in this instance, prevent the Ko- 
rean coolies from earning a living is because Koreans and 
Europeans who are familiar with the circumstances usual- 
ly give them preference over the Japanese, even at some 
inconvenience to themselves. I saw an American mission- 
ary walk some distance in the mud rather than enter a Jap- 
anese 'ricksha, which is a western way of expressing sym- 
pathy with any man who is not given fair play. That 
all Koreans do not now feel this form of discrimination is 
only because the comparatively small number of Japanese 
in Korea reduces this kind of competition to a negligible 
quantity. 

Of the insurrection, which has now been dragging along 
for nearly two years, one hears little outside of Korea, 
and not much even in Seoul. About the only reminders 
of it there are an occasional " volunteer " appeal posted 
by night in the city, and daily brief reports of colli- 
sions between Japanese gendarmes and troops and the in- 
surgents which are printed in the official gazettes. It is 
positively known, however, that some districts have been 
almost devastated, scores of villages having been obliter- 
ated, and hundreds of noncombatants killed and wounded. 
Koreans who are peacefully inclined, who are a great ma- 
jority, are caught between two fires: they cannot safely re- 
fuse supplies to the insurgents, and if they give them they 



THE SUBJUGATION OF KOREA 145 

are summarily punished by the Japanese. Some villages 
have been twice destroyed, once by the insurgents and 
again by Japanese. An. unofficial compilation based upon 
reports issued by the Residency shows that since the in- 
surrection started the number of Koreans who have 
fallen exceeds the total casualty list of both sides in the 
Spanish-American war. Apparently the insurrection has 
as much vitality as when it began, and the so-called " vol- 
unteers " continue to fight bravely notwithstanding lack 
of arms and supplies. In so far as any alteration of the 
situation could be observed when I was in Korea, the 
movement was gaining rather than losing strength. 

In some of its aspects this hopeless struggle has fea- 
tures which command respect, although that it never can 
accomplish the hoped-for restoration of Korea's indepen- 
dence is evident. That Korea is not entirely without pa- 
triots, even though they be mistaken ones, is shown by the 
assassination of D. W. Stevens at San Francisco. Stev- 
ens' nominal position at the time of his death was foreign 
adviser to the Korean Government. His real position 
was that of legal adviser to the Japanese Government, a 
place he held for many years. When Japan seized the 
reins of power In Korea, Stevens was brought there and es- 
tablished as foreign adviser of Korea, where his job, to put 
it flatly, was to advise the Korean ministry and Emperor 
to do whatever the Japanese Residency wanted them to do. 
By Stevens' " advice " were drafted and signed the series 
of agreements by which Korean independence was abro- 
gated. Rightly or wrongly, Koreans regarded Stevens as 
the arch-destroyer of Korean liberty, and it is safe to say 
that his death gave general satisfaction to them. For 
months before he left Korea the last time Stevens went 
armed, usually was attended by a Japanese guard, and dur- 
ing the disorders of 1907 In Seoul he sought refuge at 



146 THE FAR EASTERN QUESTION 

the Japanese club. This in itself conveys an impression 
of the position and policy of Japan in Korea. I was in 
Seoul when Stevens was assassinated, and there, where he 
had helped to deprive millions of Koreans of their na- 
tional birthright and where daily scores were falling in 
a fruitless struggle to regain it, Stevens' tragic death 
somehow did not seem so terrible as it may have in Amer- 
ica. It was intimated at the time that evidence of com- 
plicity of some Korean officials in the assassination of 
Stevens had been obtained, which caused an old foreign 
resident to remark: 

" I suppose we will soon hear of more ' suicides,' " 
emphasizing the last word. It may be remembered that 
at the time when suzerainty was promulgated, in 1905, 
some Korean officials who supported the Emperor in his 
refusal to sign the agreement were reported to have com- 
mitted suicide. 

To-day the situation of the Korean court would be 
ludicrous if it was not pathetic. The Retired Emperor is 
actually a prisoner between four walls and constantly 
guarded by Japanese gendarmes. His son, the present 
Emperor, is permitted to visit his father only once every 
month or two, when father and son are allowed to remain 
together for an hour in the presence of Japanese officials. 
The present Emperor cannot leave his palace without 
permission of the Residency, or receive any visitors. 
Even at public functions he is not permitted to converse 
with anyone except in the presence of a Japanese official. 

The situation of members of the Korean cabinet is al- 
most the same. They can perform absolutely no admin- 
istration acts except as they are " advised " to do by the 
Japanese vice ministers, and on the rare occasions when 
they go out each is accompanied by a guard of four 
Japanese gendarmes, who never let the minister out of 



THE SUBJUGATION OF KOREA 147 

sight. At a Korean Christian wedding which occurred 
when I was last in Seoul, and which was attended by sev- 
eral Korean officials, the lobby of the church resembled the 
ante-room of a Japanese barracks. At Imperial garden 
parties Japanese soldiers with rifles are stationed about the 
palace grounds. The Residency states that these precau- 
tions are necessary to protect the Emperor and his cabinet 
from assassination by Koreans. What a condition ! High 
Korean officials and the Emperor were in no danger from 
Koreans under the old regime. 

Nothing well could be wider of the mark than compari- 
sons so frequently made by special pleaders of Japan's 
administration in Korea to America's policy in the Philip- 
pines. In every essential respect the two propositions 
differ; Indeed, no just comparison is possible, and that at^- 
tempts to do so have not called forth indignant repudi- 
ation in America shows how little the real situation in Ko- 
rea is understood there. Having recently Investigated 
conditions in the Philippines, I have no hesitation In as- 
serting that the Philippine Government to-day is, In all Im- 
portant and essential factors which are Inseparable from 
liberal Institutions, In advance of the Government of 
Japan, and Japan's administration of Korea Is fifty years 
behind that exercised at home. 

One hardly can quit discussion of conditions In Korea 
without some mention of Christian missionaries. Mis- 
sion work in Korea has had greater success than In any 
Oriental country, and there now are from 300,000 to 
400,000 professed Korean converts. There is consider- 
able friction between the Japanese administration and the 
foreign missionaries, who from a favorable attitude toward 
Japan In the beginning have changed to one of latent hos- 
tility. The chief reason Is that many missionaries believe 
that Koreans are being mistreated by Japanese, and they 



148 THE FAR EASTERN QUESTION 

sympathize with the Koreans. On the other hand, the 
Residency is disposed to accuse some missionaries of po- 
litical activity calculated to embarrass Japan. It is known 
that many Koreans have lately become Christians, and it 
is assumed that some have taken this step in order to get 
partially under foreign protection. Missionaries recog- 
nize this disposition, and the causes for it, but assert that 
they endeavor tO' exclude converts who apply from polit- 
ical motives. As yet there has been no direct collision 
between the Residency and the missionaries, but one may 
come. Prince Ito has unofficially stated that, while he 
welcomes the presence in Korea of Christian missionaries, 
who are largely responsible for such modern education as 
Koreans have heretofore obtained, if they meddle in poli- 
tics or get in the way of Japan's policy they will have to 
go. 

On the whole, the condition of Korea cannot truthfully 
be described except as deplorable. When the so-called 
reforms which have been instituted by Japan are analyzed 
in respect to their results as distinguished from their pre- 
tensions (which is the test by which all policies must in the 
end be judged) , it will be found that almost without ex- 
ception they were designed to and have had the effect of 
giving to Japanese in Korea some special advantage. 
Several already are paying dividends to Japanese owners. 
The busy West may care nothing about the political 
status of Korea, and little about the condition of Koreans. 
While there is no probability of agitation bringing about 
an alteration of Korea's general relations to Japan, It may 
be that some form of external pressure, through the pity 
and indignation of the civilized world. Is all that can pre- 
vent the complete subjugation and exploitation by Japan 
of the Korean people. 




w 



CHAPTER XII 

THE OPEN DOOR IN KOREA 

A Pat Example — Unique Position of American Inter- 
ests IN Korea — The Policy of Japan — Elimination of 
Pseudo-Political Interests — Assurances to the United 
States — Severance of Foreign Diplomatic Relations 
With Korea — Japan's War Upon Foreign Interests — 
The Fight on Collbran & Bostick — Underhand Meth- 
ods — Persecution of American Firm — The " Kapisan " 
Case — Discrimination Against Foreign Interests and 
Trade — Uses of the Railways — The "Open Door" a 
Farce — Remaining Obstacles to Complete Annexation 
— Korea a Japanese Preserve. 

In Korea one finds a pat example of Japan's real atti- 
tude toward the principle of the " open door." When, 
early In 1904, she occupied the country under excuse of 
temporary military necessity, Korea was an independent 
nation. Accepting Japan's assurances that foreign In- 
terests would be safeguarded, the interested powers oblig- 
ingly acceded to gradual assumption by her of absolute 
sovereignty. Here, then, Japan has had a free hand; 
and the broader Intent of her political and commercial 
policy may be judged by its efFects. 

While development of foreign interests In Korea pro- 
gressed along much the same lines as In other Oriental 
countries, which, means that commercial and Industrial 
enterprise was frequently used as a cloak for political 
designs, It has been rather noteworthy for providing a 
striking exception of the success of legitimate enter- 

149 



150 THE FAR EASTERN QUESTION 

prise. In one respect Korea is unique. It is the only 
eastern country that I know of where American enter- 
prise predominates among purely foreign activities, and 
it is gratifying to be able to state that in Korea American 
interests have in the past enjoyed no special advantages, 
and have made way on their merits. Dr. H. N. Allen, who 
for so many years was American minister to Korea, 
exerted himself to promote legitimate enterprises of his 
nationals, and, owing to confidence reposed in him by the 
former Emperor, with marked success. The first railroad 
in Korea, the principal mining Industries, the Seoul elec- 
tric railways, electric lighting plant, water works and tele- 
phone system are all monuments to American enterprise, 
which undertook these matters when their profitable op- 
eration was problematical. Many Americans have con- 
tributed to the modern development of Korea, but un- 
doubtedly the more enterprising and Important Is the firm 
of Collbran & Bostick, which operates the Seoul street 
railways, lighting, water works and telephones, and which 
has large mining Interests. 

It surprised no one that Japan, when she took control 
of Korea, sought to eliminate those foreign enterprises 
and concessions which obviously had been political moves 
In disguise, and which might be considered obstacles to her 
administration. As not a single American Interest In 
Korea ever belonged In this category, they did not an- 
ticipate difficulty. When I was In Korea In 1905, Amer- 
icans were not uneasy about Japan's permanent acquisi- 
tion of the country, which was even then perceived to be 
coming, although the fiction of Korean Independence was 
outwardly preserved. They had been assured, and the 
United States Government also was assured, that Japan 
would treat American Interests equitably, and would pur- 
sue a policy of encouragement and support with a view 



THE OPEN DOOR IN KOREA 151 

to inducing other legitimate foreign investments. In- 
deed, this seemed so reasonable and likely to benefit all 
interests In the country that even astute men were war- 
ranted In believing It. It Is evident that the Washington 
Government was then convinced of Japan's good inten- 
tions, for It readily acceded to her wishes, recalled Dr. 
Allen, and soon after abolished its legation altogether, 
agreeing to thereafter conduct all diplomatic negotiations 
with Korea through the Tokyo Foreign Office. 

As soon, however, as Japan had practically Isolated 
foreigners in Korea by severing their direct diplo- 
matic relations with the Korean Government, and substi- 
tuting In their stead relations with Japan, the Japanese 
administration in Korea began to harry foreign interests, 
including American. Collbran & Bostick, being the larg- 
est and most influential foreign firm, was made the chief 
object of attack; and the details of its fight for Its rights 
are Interesting from an American point of view, and also 
illuminate Japan's policy in regard to foreign Interests in 
general. 

Japanese, like most Orientals, rarely pursue a direct 
method, and their attempt to get Collbran & Bostick out 
of Korea first took the formi of a proposition to purchase 
Its interests. Collbran & Bostick was not anxious to sell, 
having labored for years to establish itself and having 
several promising new enterprises under way ; but the firm 
named a price, which Japan declined to give. Some of 
those who were privy to this proposition thought at the 
time that the American firm asked too much for its Inter- 
ests, but a Japanese official in Seoul recently told an Amer- 
ican official that he Is sorry that Japan refused the offer. 
At that time, however, Japan had little doubt of her 
ability to Induce Collbran & Bostick to In time be more 
reasonable; and a policy of hindrance and obstruction was 



152 THE FAR EASTERN QUESTION 

inaugurated. This obstructive policy usually assumed in- 
direct and surreptitious shapes, but upon occasion it took 
direct form. 

One of the last acts of the Korean Government before 
occupation of the country by the Japanese army was to 
grant a mining concession under the then existing regula- 
tions to Collbran & Bostick. The conditions, which were 
those which governed other similar grants, gave the Amer- 
ican firm a right to locate any unoccupied mining district 
and to work it, paying the government royalty of 25 per 
cent, of the profits. This concession, which was approved 
by the Emperor in conjunction with other matters involv- 
ing the same parties, was duly signed, sealed and recorded 
at the American legation. The grant contained a clause 
requiring that the claim be located within a specified time, 
and providing that no other similar concession be granted 
before Collbran & Bostick had located its claim. 

A few days after this concession was registered Japa- 
nese troops occupied Seoul without any previous notice, 
and from that day the Japanese have ruled the country. 
Japanese military regulations prevented Collbran & Bos- 
tick from at once prospecting and locating Its claim, al- 
though there were no serious hostilities In Korea after the 
first few weeks. Immediately after the conclusion of 
peace, Collbran & Bostick prepared to locate its conces- 
sion, but Japanese authorities refused to Issue a passport 
to the firm's expert to travel in the interior. Although 
no foreigners had been permitted to travel in the coun- 
try, Japanese engineers had thoroughly prospected the 
entire unoccupied mining region, and had located every 
promising claim they could find. Finally the engineer 
of the American firm managed, by wearing Korean cloth- 
ing, to reach the desired district and located a claim for 
Collbran & Bostick. In October, 1905, due notice of 



THE OPEN DOOR IN KOREA 153 

the location of the concession was filed at the American 
legation in Seoul. 

When the location of the district came before the 
Korean Government for final confirmation the Japanese 
regime was firmly in control of the country, and the 
Korean Emperor was virtually a prisoner in his palace. 
An American, D. W. Stevens, who was for years employed 
as a legal adviser by the Japanese Government, had been 
brought to Korea and made the adviser of the Korean 
Government on foreign affairs; where, owing to his na- 
tionality, he made a convenient cloak for Japan's assault 
upon foreign interests. It may be well to state that ever 
since Japanese occupation the Korean and Japanese gov- 
ernments have been identical in so far as foreign affairs 
are concerned, although the fiction of local severance was 
until recently preserved, and I will hereafter in mention- 
ing the Korean Government name the real sovereign — 
Japan. Acting upon the advice of Mr. Stevens (who was ^ 
no doubt instructed from Tokyo to give it), the Govern- 
ment refused to confirm the concession of Collbran & Bos- 
tick on the following grounds : ; 

i 

1. That the district had already been located by Japa- | 
nese. ' 

2. That the Korean Household seals attached to the 
concession were not legally sufficient. 

3. That the Council of State had not formally ap- 
proved the concession. 

This compelled a representative of Collbran & Bostick 
to go to Tokyo (the American legation at Seoul having 
been abolished) and urge its claim through the American 
ambassador to Japan, thus transferring, as the Japanese 
had foreseen, the matter to the hands of persons not fa- 



154 THE FAR EASTERN QUESTION 

miliar with conditions in Korea or the history of this par- 
ticular grant. 

Then began a struggle by Collbran & Bostick to secure 
its rights, which is not yet terminated. I met Mr. 
Henry Collbran, the head of the firm, in Japan at the 
time when he first went there to defend its position, and 
I have followed the contest since. In trying to support 
its position the Japanese Government resorted to innumer- 
able petty methods, some of which properly may be called 
despicable. It transferred the fight to Washington. 
Japan's secret service men in America and England 
were employed to scrutinize the past of Messrs. Collbran 
and Bostick to discover, if possible, something injurious 
to their character which might be used against them in 
this matter. Employes of the Japanese legation at Wash- 
ington circulated reports, taking pains that they would 
reach the State Department, that Messrs. Collbran and 
Bostick are adventurers who managed by fraudulent 
means to get some valuable concessions in Korea, and 
which they are now trying to blackmail the Japanese into 
purchasing at an exorbitant price. Japanese officials inti- 
mated to American officials in Korea that the Imperial 
seals affixed to the document granting the concession were 
stolen and illegally used. Such were the means employed 
to prejudice Collbran & Bostick's case at Washington, and 
in the western press. 

Officially the Japanese administration in Korea, and the 
Tokyo Foreign Office, outwardly relied upon technical 
points to defeat the American claim. It was alleged that 
a Japanese had previously located the same district, but 
upon it being shown that this claim was not registered 
until November, 1905, or after notice of the location of 
the American claim was formally given, this pretense 
was abandoned. In the end, as point after point gave 



THE OPEN DOOR IN KOREA 155 

way under scrutiny, the Japanese administration fell 
back upon the contention that Collbran & Bostick's con- 
cession was improperly obtained from the Korean Em- 
peror. It was alleged that the concession was promul- 
gated just prior to the Russo-Japanese war, when the 
timid and frightened Emperor was induced to assent by 
political representations. It is true that the concession 
was granted just a few days before hostilities between 
Japan and Russia began, and it is also true that the in- 
terested parties, anticipating a period of disorder, made 
all haste to close the matter before the storm broke; 
which is evidence of business precaution. But there Is 
nothing to prove that political influence was used to In- 
duce the Korean Emperor to assent; Indeed, It is hard to 
understand what political pressure could have been em- 
ployed. The Emperor had had relations with Collbran 
& Bostick for years, was personally Interested In some of 
Its enterprises, and this particular concession had been 
discussed many times before. The Japanese contention 
that the documents were Improperly or fraudulently sealed 
seems absolutely to be destitute of foundation, and Is a 
part of the campaign of Innuendo. 

The grounds for refusing to confirm this concession 
are so artijficlal and flimsy that the case would perhaps 
long ago . have been decided In favor of the American 
claimants had not Japan adopted a policy of trying to 
exhaust them, by delay. In this she was favored by cir- 
cumstances, especially by repeated shifts in American con- 
sular representation at Seoul, Each new consul had to 
take up the case from the beginning In order to become fa- 
miliar with it, and this Is no easy task, for by now the 
ofliclal documents, reports and correspondence would fill 
a large volume. The expense of the three year fight to 
Collbran & Bostick has already been nearly $30,000.00. 



156 THE FAR EASTERN QUESTION 

The firm was crippled in other ways. Soon after the 
concession was granted, Collbran & Bostick, not feeling 
able to entirely finance the project by itself, entered into 
a contract with a British syndicate by which the latter 
agreed, in consideration of a half interest in the property, 
to advance, upon receipt of a favorable report from an 
expert, $500,000.00 for the purpose of developing the 
mines and building a milhng plant. Japan contended that 
this contract constituted a transfer of the concession to 
! British nationals, and the State Department at Washing- 
1 ton was disposed to adopt this view. This compelled Coll- 
bran & Bostick to cancel Its contract (which could have no 
effect until the concession was confirmed, and then only 
on a certain specified contingency), which they succeeded 
in^ doing at a considerable loss. It now appears that 
this pluck and persistence will succeed, for the Japanese 
Government has Intimated that the concession will be con- 
firmed. Even In this tardy act of justice It wants Coll- 
bran & Bostick to accept the concession under the new min- 
ing regulations which Japan has promulgated, which the 
firm is not Inclined to do ; but these regulations Will be con- 
sidered later. 

Not satisfied with obstructing the confirmation of this 
mining concession, the Japanese have encroached upon the 
interests of Collbran & Bostick In other- ways. The 
American firm owns the Seoul telephone franchise, now 
eighteen years old. Several years ago the Japanese lega- 
tion in Seoul put In a private telephone system connecting 
its various departments. A protest was made by Coll- 
bran & Bostick, whereupon the Japanese minister replied 
that the system was for private oflicial use only, and that 
It would not be extended. When the Japanese seized 
Korea a settlement was laid out Inside Seoul, surrounding 
the Japanese residency, and recently the legation telephone 



THE OPEN DOOR IN KOREA 157 

system has been extended and made a public service, ^ 
which now has over 1,000 subscribers. Collbran & Bos- 
tick, in protesting against this infringement upon its fran- 
chise, has offered to purchase the Japanese system at a fair 
valuation and waive all damages in order to adjust the 
matter, but so far no satisfaction has been obtained, while 
the Japanese system continues its public service. In re- 
cently replying to an official representation about this 
matter, the Japanese Residency advanced the argument 
that " Chin-ko-gai," as the Japanese section of Seoul Is ! 
called. Is not properly a part of the city; a puerile subter- 
fuge, since it is entirely located inside the wall and near 
the heart of the town. 

The " Kapisan " case, as the Collbran & Bostick mining 
concession is named, Is watched with intense interest by 
all foreigners In Korea, and by persons who have In- 
vestments there ; for It Is regarded as a test In many ways. 
No other foreign interest Is so powerful In wealth and 
Influence; the position of the American firm Is regarded 
as being peculiarly meritorious and clear; it Is believed 
that the United States will at present go farther in press- 
ing Japan than any other power, and that Japan will 
yield more to that nation. So foreigners In Korea feel 
that should Collbran & Bostick lose It will be the death 
knell of foreign Interests in the country, and that it 
will be but a short time before all are forced to sell out 
to Japanese at a disadvantage, or see their property de- 
cline under Invidious discrimination. 

This feeling Is not sentiment, but is founded upon hun- 
dreds of Instances which have occurred under the Japanese 
regime. It Is recognized that few men would have dis- 
played the spirit of Messrs. Collbran and Bostick, or could 
have for so long survived such an unequal contest. It Is 
believed by foreigners In Korea that the firm would have 



158 THE FAR EASTERN QUESTION 

abandoned the struggle long ago, and sold out to the 
Japanese, had not its honor been impugned at Washing- 
ton. The firm let it be known that under no circum- 
stances will it sell out its interests in Korea before all its 
claims have been^fully and unequivocally recognized, thus 
making it impossible for it to be charged effectively with 
having blackmailed the Japanese Government into pur- 
chasing a. lot of worthless mining claims. It should be 
kept in mind that the " Kapisan " property is as yet little 
more than a promising prospect ; It is not yet a mine, and 
its owners do not claim that it Is; so, In a measure, they 
have made their expensive fight for principle, fully ap- 
preciating that the money may never be recovered. Many 
foreigners in Korea think, however, that it will not be 
possible for Collbran & Bostick to continue to do a profit- 
able business In Korea after having antagonized the Jap- 
anese Residency. The firm's presence will be a continual 
reminder to Koreans that Japan is not omnipotent, and 
it Is predicted that the Japanese will never rest until 
It is gotten out of the country. When one considers the 
means for annoyance and obstruction which Japan can 
command, and which she has employed in similar cases, 
from police Interference to browbeating Korean employes 
of foreign concerns. It seems probable that these fears may 
be realized. Japanese financial interests tried In vain to 
obstruct the capitalization of Collbran & Bostlck's Seoul 
water works and cause the franchise to lapse. 

As examples of Japan's policy of excluding other for- 
eigners from participating In the development of Korea 
may be cited the new mining and forestry regulations. 
On their face these regulations are not objectionable, but 
each contains a " joker " designed to place concessionaries 
under the thumb of the Residency. The new mining reg- 
ulations change the royalty to the government from 25 



. THE OPEN DOOR IN KOREA 159 

per cent, of net profits to i per cent, of the gross output, 
which is an apparent reduction ; but there is a clause under 
which a special land tax may be imposed, thus opening a 
way to " milk " any property for all it can stand. In 
the forestry regulations is a clause giving the minister 
of agriculture authority to " for the public good " cancel 
any concession and confiscate the property, and there is no 
appeal from his decision. Furthermore, the Government 
is not legally responsible for acts of this minister, which 
means that dispossessed concessionaries have no legal 
redress. 

The history of the famous " Su-an syndicate," and other 
foreign enterprises In Korea which have been involved 
in Japanese administrative tangles, is Interesting; but ex- 
amples already given must serve. An Important factor 
in advancing Japanese in contradistinction to other for- 
eign interests In Korea Is the railways, which are now all 
owned by the Japanese Government and are, consequently, 
a part of the governmental business system. Foreign 
business firms In Korea complain that Japanese firms ob- 
tain transportation rebates which are equivalent to a re- 
mission of import duties, and while these assertions cannot 
definitely be proven, there is much circumstantial evidence 
to sustain them. Such a proceeding is in harmony with 
Japan's policy elsewhere. The revised railway rate 
schedules, which went Into effect April i, 1908, are clearly 
designed to build up Fusan at the expense of Chemul-po, 
which means practical control over Korean imports by 
Japanese firms and transportation companies. Foreign- 
ers are also handicapped by an elaborate system of es- 
pionage, which has gone so far as to open and retard, 
often to stop altogether private correspondence and tele^ 
grams. Even consular mail bags have been opened. In 
the room which I occupied when last in Seoul Japanese 



i6o THE FAR EASTERN QUESTION 

secret service men searched, in his absence, the personal 
effects of Douglas Story, an English correspondent, in a 
vain attempt to find an important communication which 
had been sent to him by the deposed Emperor. I was 
afraid to entrust my correspondence to the post, and sent 
it to be mailed outside of Korea by a friend. This is 
the situation of foreigners in Korea under the adminis- 
tration of Japan. Yet the western world not only 
regards the condition with seeming indifference; it has 
from time to time applauded Japan in her so-called efforts 
to civilize that country. Japanese are frequently heard 
to refer to other foreigners in Korea as " foreign ad- 
venturers." What, I wonder, considering the way Jap- 
anese are exploiting the country, would they call them- 
selves ? 

Political Korea Is doomed, is indeed already perished; 
but there remain some minor bulwarks behind which ad- 
vocates of the " open door " may still make a stand. One 
of these is extra-territoriality, another is the Korean 
treaties with other nations which guarantee most favored 
nation treatment. Until these treaties are abrogated 
the conventional tariff schedule cannot be altered without 
the consent of interested powers. These are two limita- 
tions upon Japan's authority In Korea, and she is pre- 
paring to ask the powers to consent to their abolition. At 
present other foreigners are not legally under Japanese 
control, but have the same status as In China, and the 
conventional tariff Is the only obstacle which now pre- 
vents Japan from applying her new protective tariff to 
Korea. 

It Is believed In Korea that the real mission of D. W. 
Stevens to America, which resulted In his death, was to try 
to gain the consent of the United States to removal of 
extra-territoriality and the Inclusion of Korea in Japan's 



THE OPEN DOOR IN KOREA i6i 

jfiscal entity. This accomplished, and acceded to by other 
treaty powers, the complete annexation of Korea to Japan 
will be accomplished. 

In this connection the recently signed arbitration 
treaty between Japan and the United States, which con- 
tains a mutual agreement for the protection of trade-marks 
in Korea, applies to the situation of American interests 
there. Reports of the contents of this treaty which have 
been published intimate that the United States has agreed 
to the abolition of extra-territoriality In Korea to the ex- 
tent of permitting all trade-mark disputes in which Amer- 
icans are concerned to be tried in the Korean (Japanese) 
courts. Under extra-territoriality, if an American is de- 
fendant in such an action he can defend himself in the 
American consular court. American firms which do busi- 
ness in Korea fear that this alleged provision of the treaty 
will work to their injury. The only trade-mark piracy in 
Korea which amounts to anything is practiced by Japanese, 
even the Japanese Government being tainted with this 
abuse. Under extra-territoriality an American complainant 
against piracy of trade-marks could get little satisfaction in 
Japanese courts w^hen Japanese were involved as defend- 
ants (no more can they in Japan), but they felt secure in 
the court of their own nationality. If the Japanese courts 
are now to take jurisdiction of such Issues, Americans 
may find themselves in the position of being prosecuted 
for using their own trade-marks, especially if the princi- 
ple of priority of registration, as Is the usage In Japan, 
Instead of priority of use, is enforced In Korea. Publica- 
tion of the exact text of this treaty, which waits formal 
ratification by both nations, will be Interesting to Ameri- 
can firms which do business In Korea, where It has not 
heretofore been possible, as has occurred to foreigners 



9^ 

1 62 THE FAR EASTERN QUESTION 

in Japan, for Japanese to pirate a foreign trade-mark and 
then enjoin its original owners from using it. 

The plain truth is that as rapidly as circumstances will 
permit Japan is turning Korea, as she already has done 
with Formosa, into a Japanese commercial and industrial 
closed preserve; indeed, it is hardly more than this now. 
To pretend that the " open door " obtains there is sheer 
nonsense. In regard to foreign investments in Korea, 
prospective investors should know what they may expect. 
No prudent man will purchase a law-suit. Any new for- 
eign investments in Korea will almost certainly soon find 
themselves involved with the Japanese administration, 
and be compelled to resort to their national representatives 
at Tokyo for assistance. Under these circumstances for- 
eign capital will hesitate to enter Korea, and exploitation 
of Japan's preserve will be left to Japanese, which seems 
to be what her statesmen desire, although it may strike 
many people as short-sighted policy. As to those foreign 
interests which are already there, bare justice requires that 
if their position cannot be made permanently tenable, their 
governments will aid them to get out with a minimum of 
loss. 



CHAPTER XIII 
THE BALKANS OF THE EAST 

Manchuria a Danger Spot — Course of Recent 
Events There — The Termination of Hostilities — Vari- 
ous Political Entities Involved — Russia, Japan and 
China — Chaotic Conditions — Russia's Position — Her 
"Sphere" the Larger — Japan's Position More Signifi- 
cant — Reasons for This Analyzed — Japan and China 
— The Yuan-Komura Agreement — The Supplementary 
Articles — Antecedents of This Treaty — The Status of 
Japan — " Police " and " Railway Guards " — Occupation 
of the Country. 

Manchuria to-day is to the Far East what the Balkan 
states, have for so long been to Europe. This salubrious 
and fertile region, with an area equal to that of France 
and Germany combined, is the focus of great political 
ambitions and designs; and here the Issues which may 
cause another international conflict of vast proportions 
are again moving toward a culmination. 

When in August, 1905, Russia and Japan, in the 
treaty of peace ratified by them, mutually engaged " To 
evacuate completely and simultaneously Manchuria, ex- 
cept the territory affected by the lease of the Liao-tung 
peninsula," and " To restore entirely and completely to 
the exclusive administration of China all the portions of 
Manchuria now in occupation or under the control of 
Russian or Japanese troops," there was a disposition 
throughout the world to regard these assurances as 
affording a basis for satisfactory solution of the vexed 

163 



1 64 THE FAR EASTERN QUESTION 

questions involved. In some quarters the fact that eight- 
een months from the signing of the treaty was fixed as the 
maximum time limit within which the restoration of Man- 
churia to China was to be completed gave rise to misgiv- 
ings; but these were smothered in general rejoicing over 
the termination of hostilities, especially as the two govern- 
ments pledged themselves to reduce the period of read- 
justment if it proved to be practicable. 

Other nations interested in the future of the Far East 
were at that time apparently disposed, at least in respect 
to diplomatic attitude, not to be over-exacting about de- 
velopments in those regions during the interval, but rather 
to await its termination before taking decisive steps in 
their own or China's behalf. Nevertheless, the feeling 
of security so widespread in the West when peace was 
made has gradually been undermined by the course of 
events In Manchuria and Korea since then, and is now re- 
placed by an uncertainty tainted by uneasiness. Realiza- 
tion that peace between Russia and Japan does not neces- 
sarily mean an adjustment of the situation In Eastern 
Asia that will satisfy a majority of western powers is 
growing among those In touch with events and policies. 
This is none the less true because of the somewhat ominous 
reticence In diplomatic circles which followed the war, 
and that public attention, beguiled Into temporary repose, 
was for a time diverted. 

Since the war ended Manchuria has witnessed the di- 
rect application. In some measure, of three distinct polit- 
ical entitles, each animated by widely differing purposes, 
yet compelled by circumstances temporarily to compromise 
their antagonisms, and to pretend a harmony which none 
of them feels. These are China, Russia and Japan: 
China being the recognized sovereign of the country, 
feebly attempting to resume her governmental functions. 



THE BALKANS OF THE EAST 165 

while Russia and Japan are at present the actual sover- 
eigns, basing their authority upon military occupation. 
Only semi-chaotic conditions could prevail under such cir- 
cumstances; but efforts of the three nations each to have 
its own way and secure to itself the greater advantage 
have developed much of significance; and other interested 
nations, while abstaining from action likely to annoy or 
embarrass the recent belligerents, have been keenly alive 
to what is going on. This is necessary vigilance, as it 
is only by accurate knowledge of the real situation, and 
the designs centering here, that intelligent action is pos- 
sible when time for action comes. For It is not to be an- 
ticipated that civilization will indefinitely tolerate a con- 
dition so widely detrimental to general interests and so 
teeming with causes for international friction. 

So numerous, complex and diverse are the elements 
through which order and stability are endeavoring to 
push their way In this uneasy country that only a compre- 
hensive review of existing conditions, and the conflicting 
forces at work, can throw light on the subject. Of the 
territory of Manchuria proper, Russia now occupies ap- 
proximately two-thirds, embracing the region drained by 
the Sungarl and Amur and the more Important tribu- 
taries of these great rivers. While this part of the coun- 
try Is not now so thickly populated or as thoroughly culti- 
vated as Is the valley of the Liao, It is believed to pos- 
sess greater potentialities for development. If one as- 
sumes that the present zones of occupation will represent 
a permanent division of Manchuria between Russia and 
Japan, there is no doubt that Russia has much the better 
of the bargain, considering only the natural resources of 
the country. Beside Manchuria, nearly the whole of 
eastern Mongolia Is now practically occupied, though not 
so specifically, by Russia. -Here again Russia's position 



1 66 THE FAR EASTERN QUESTION 

is better than that of her rival, as Japan's influence 
extends over only a small corner of Mongolia lying adja- 
cent to southern Manchuria, while Russia's sphere em- 
braces nearly half of the entire domain of China's great 
northern possession. 

Notwithstanding that Japan's present control of Chi- 
nese territory is decidedly inferior geographically, com- 
pared to regions under Russian control and influence, there 
are circumstances which give Japan's position greater in- 
ternational significance. Chief of these is the present 
superior military and naval potency of Japan in this part 
of the world. Then conditions are such that Japan's 
immediate policy will be, to a large extent, a powerful 
factor in determining the course of other powers. It is 
clear that should Russia, after extreme attenuation of the 
evacuation interval, show a disposition to hold to what she 
has, she will find it exceedingly difiicult to maintain such 
a position before the powers and Japan, in the face of a 
complete and candid fulfillment of Japan's promises. On 
the other hand, should Japan hold to what she has gained, 
a similar attitude by Russia would substantially be justi- 
fied and her position become practically impregnable. 
Thus in respect to these two nations the key to the situa- 
tion now rests with Japan, and gives to her policy and ac- 
tions the greater immediate possibilities in influencing the 
destiny of Manchuria, and the future of the whole Far 
Eastern Question so inevitably involved herein. 

The fundamental proposition here Indicated gives to 
•the actions of Japan In Manchuria and eastern Asia a 
greater importance and interest, for the time, than Is at- 
tached to those of Russia. Besides, a deep distrust of 
Russia's designs In this part of the world, and a suspicion 
of her diplomatic assurances so strong. In the western 
popular mind, as to deprive them of power to beguile, 



THE BALKANS OF THE EAST 167 

insures that her actions will be closely scrutinized. 
What is not fully appreciated in America is that there is 
little difference between the theory and working method 
of a western diplomacy deeply grafted with Orientalism, 
and an eastern diplomacy which has recently found it 
convenient and necessary to adopt western forms. I 
think that among more Important nations Russia and 
Japan, in their diplomatic methods and general foreign 
policy, are more nearly alike than any other two powers. 
And a compromise of their differences in eastern Asia, 
by mutual concessions, Is not so unlikely as some imagine 
It to be. If such a compromise should take the shape of 
an agreement to retain their present hold on Manchuria 
and Mongolia, it is unlikely that the world will be taken 
into their confidence, but will be left to learn the fact from 
the analogy of events. I will, therefore, in attempting 
to depict conditions in eastern Asia from the termination 
of hostilities to the present time, give to Japan the priority 
which her position demands, realizing that an elucidation 
of her pohcy and actions also will touch and Illuminate 
all the principal interests concerned. 

In addition to the treaty of peace with Russia the pres- 
ent relations of Japan to Manchuria are presumably cir- 
cumscribed by a treaty defining certain relations between 
Japan and China, which was signed at Peking on Decem- 
ber 22, 1905,^ and subsequently ratified. As this docu- 
ment forms the diplomatic basis for solution of the com- 
plex relations now existing between China and Japan, it 
Is reproduced here, with the supplementary agreement, 
omitting the preamble. 

Article I — The Imxperlal Chinese Government con- 
sent to all transfers and assignments made by Russia 

1 Appendix C. 



1 68 THE FAR EASTERN QUESTION 

to Japan by articles V and VI of the treaty of peace. 

Article II — The Imperial Japanese Government en- 
gage that in regard to the leased territory as well as in 
the matter of railway construction and exploitation, it will, 
so far as circumstances permit, conform to the original 
agreements concluded between China and Russia. In 
case any question arises in the future on these subjects, 
the Japanese Government will decide it in consultation 
with the Chinese Government. 

Article III — The present treaty shall come into force 
from the date of signature. It shall be ratified by their 
majesties the Emperor of Japan and the Emperor of 
China, and the ratifications shall be exchanged at Peking 
as soon as possible, and not later than two months from 
the present date. 

In witness whereof, etc. 

(Signed.) 

SUPPLEMENTARY AGREEMENT 

Article I : — The Imperial Chinese Government agree 
that as soon as possible after the evacuation of Man- 
churia by the Japanese and Russian forces, the following 
cities and towns in Manchuria will be opened by China 
herself as places of international residence and trade : — 
Shingking Province — Fengwangcheng, Llao-yang, Hsln- 
mintun, Tieling, Tungklangtzu and Fakumen; KIrin 
Province — Changchun, KIrin, Harbin, NInguta, Hun- 
chun and Sansing; Heilungklang Province — Tsitsihar, 
Hailar, Aihun and Manchuh. 

Article 2 : — In view of the earnest desire of the Im- 
perial Chinese Government to have the Japanese and 
Russian troops and railway guards In Manchuria with- 
drawn as soon as possible, and in order to meet this de- 
sire, the Imperial Japanese Government, in the event of 



THE BALKANS OF THE EAST 169 

Russia agreeing to the withdrawal of her railway guards, 
or In case other proper measures are agreed between 
China and Russia, consent to take similar steps accord- 
ingly. When tranquillity shall have been reestablished 
In Manchuria, and China shall have become herself capa- 
ble of affording full protection to the lives and property 
of foreigners, Japan will withdraw her railway guards 
simultaneously with Russia. 

Article 3 : — The Imperial Japanese Government, 
Immediately upon the withdrawal of their troops from 
any region In Manchuria, shall notify the Chinese Gov- 
ernment of the regions thus evacuated, and even within 
the period stipulated for the withdrawal of troops In the 
additional articles of the treaty of peace between Japan 
and Russia, the Chinese Government may send necessary- 
troops to the evacuated regions of which they have al- 
ready been notified as above mentioned, for the purpose 
of maintaining order and tranquillity In those regions. If, 
in the regions from which Japanese troops have not yet 
been withdrawn, any villages are disturbed or damaged 
by native bandits, the Chinese local authorities may also 
dispatch a suitable military force for the purpose of cap- 
turing or dispersing tl^ose bandits. Such troops, how- 
ever, shall not proceed within 20 Chinese li from the 
boundary of the territory where Japanese troops are sta- 
tioned. 

Article 4 : — The Imperial Government of Japan en- 
gage that Chinese public and private property In Man- 
churia, which they have occupied or expropriated on ac- 
count of military necessity, shall be restored at the time 
the Japanese troops are withdrawn from Manchuria, and 
that such property as is no longer required for military 
purposes shall be restored even before such withdrawal. 

Article 5 : — The Imperial Chinese Government en- 



I70 THE FAR EASTERN QUESTION 

gage to take all necessary measures to protect fully an-d 
completely the grounds in Manchuria where the tombs 
and monuments of Japanese officers and soldiers who 
were killed in the war are located. 

Article 6 : — The Imperial Chinese Government agree 
that Japan has the right to maintain and work the mili- 
tary railway line constructed between Antung and Mouk- 
den, and to improve said line so as to make it fit for the 
conveyance of commercial and industrial goods of all na- 
tions. The term for which such right is conceded is for 
fifteen years from the date of the completion of the im- 
provements above provided for, the work of such im- 
provements to be completed within two years, exclusive of 
a period of twelve months during which work will have 
to be delayed owing to the necessity of using the existing 
road for the withdrawal of troops. The term of this 
concession is therefore to expire in the 49th year of Kuang 
Hsu (1923). At the expiration of that term, the said 
railway shall be sold to China at a price to be determined 
by appraisement of all its properties by a foreign expert 
to be selected by both parties. The conveyance by the 
railway of the troops and munitions of war of the Chi- 
nese Government prior to such sale shall be dealt with in 
accordance of the regulations of the Eastern Chinese 
Railway. Regarding the manner in which the improve- 
ments of the railway are to be affected, it is agreed that 
the person undertaking the work on behalf of Japan shall 
consult with a commissioner dispatched for the purpose 
by China. The Chinese Government will also appoint a 
commissioner to look after the business relating to the 
railway as is provided In the agreement relating to the 
Eastern Chinese Railway. It Is further agreed that de- 
tailed regulations shall be concluded regarding the tariffs 




Railway Station at Moukden. 




The Railway Station, Liao-yang, Manchuria. 



THE BALKANS OF THE EAST 171 

for the carnage by the railway of the public and private 
goods of China. 

Article 7 : — The Governments of China and Japan, 
with a view to promote and facilitate intercourse and 
traffic, will conclude as soon as possible a separate con- 
vention for the regulation of connecting services between 
the railway lines in South Manchuria and all other rail- 
way lines in China. 

Article 8 : — The Imperial Chinese Government en- 
gage that all materials required for the railways in South 
Manchuria shall be exempt from all duties, taxes and 
likin. 

Article 9 : — The methods of laying out the Japanese 
settlement at Yinkow (Newchwang) in the province of 
Shingking, which has already been opened to trade, and 
at Antung and Moukden in the same province, which are 
still unopen although stipulated to be opened, shall be 
separately arranged and determined by officials of Japan 
and China. 

Article 10: — The Imperial Chinese Government 
agree that a joint-stock company of forestry, composed of 
Japanese and Chinese capitalists, shall be organized for 
the exploitation of the forests in the regions on the right 
bank of the Yalu river, and that a detailed agreement 
shall be concluded in which the area and term of the con- 
cession, as well as the organization of the company and 
all regulations concerning the joint work of exploitation, 
shall be provided for. The Japanese and Chinese share- 
holders shall share equally in the profits of the undertak- 
ing. 

Article 11: — The Governments of Japan and China 
engage that in all that relates to frontier trade between 
Manchuria and Korea the most favored nation treatment 
shall be reciprocally extended. 



172 THE FAR EASTERN QUESTION 

Article 12: — The Governments of Japan and China 
engage that in all matters dealt with in the treaty signed 
this day or in the present agreement the most favorable 
treatment shall be reciprocally extended. 

(Signed) 

This treaty, in itself, merely records China's assent to 
those articles of the Russo-Japanese peace treaty by 
which Russia agrees to turn over to Japan Port Arthur, 
Dalny and the territory embraced in her lease of the 
Kwang-tung peninsula, and the Chinese Eastern Railway 
south of a specified point; and also to the terms for the 
mutual evacuation by Russia and Japan of Manchuria. 
Although no outward friction developed at the confer- 
ences, it was well known that China acceded to the treaty 
with great reluctance, especially in the matter of the trans- 
fer of the Kwang-tung lease to Japan. China would 
have preferred to have rescinded this obnoxious lease al- 
together. She also was dissatisfied with some of the con- 
ditions for the evacuation of her provinces in Manchuria. 
However, she was powerless to resist, and agreed to Ja- 
pan's proposals. One phrase in the treaty may be spe- 
cially mentioned. The second article provides that in 
case any question arises in the future concerning, sub- 
ject matters of the instrument, " the Japanese Government 
will decide it in consultation with the Chinese Govern- 
ment." Here is recognizable the hand which drafted the 
series of documents by which Japan's suzerainty over 
Korea, amounting practically to annexation, was estab- 
lished. It can hardly be assumed that this departure 
from, usual phraseology, specifically giving to Japan 
alone the right to decide upon the interpretation of the 
treaty, was accidental. 

But the working method of the treaty, In so far as It 



THE BALKANS OF THE EAST 173 

determined upon details, Is embraced in the supple- 
mentary articles. It was announced at the time the 
treaty was promulgated that Its chief object was to es- 
tablish a definite basis for Japan's position In Manchuria, 
and to provide a way to work out the details of the In- 
terval of military occupation. That many Important 
matters not specifically referred to either In the treaty or 
supplement would require subsequent adjustment was rec- 
ognized, and these were left to be considered by a future 
convention, or by regular diplomatic representatives of the 
two nations. As to the actual operation of the supple- 
mentary articles, this may be best Illustrated by a descrip- 
tion of conditions In Manchuria since the war, which will 
bring out, In a practical way, all the propositions In- 
volved. 

For a short time after hostilities terminated, both bel- 
ligerents maintained the then existing status quo, while 
their military commissioners consulted about details for 
withdrawal of the armies. Marshal Oyama left Mouk- 
den in November, 1905, and returned to Japan. His 
departure may be said to fix the beginning of the evac- 
uation movement, and the turning point Into what may 
be termed the occupation Interval. Marshal Oyama 
was succeeded by General Oshima, who assumed com- 
mand of all Japanese elements in Manchuria, under the 
title of Viceroy. He established headquarters at Llao- 
yang, and divided the country into districts, each under a 
mihtary administrator. Soon after Oshima's arrival the 
movement of troops to Japan was commenced, and con- 
tinued with reasonable rapidity until by the beginning of 
summer, 1906, the greater part of the vast army was 
withdrawn. Just how many were left was not easy to 
ascertain. While In Manchuria In the summer of 1906, 
I asked a Japanese officer how many troops Japan then had 



174 THE FAR EASTERN QUESTION 

there, and he replied : " We have no troops ; only police 
and railway guards." It Is amusing how Japanese offi- 
cials, even in casual conversation, persist in adhering 
to the phraseology of these mild diplomatic fictions. The 
" police " and " guards " were then regular soldiers of 
the Japanese army. But technically, conforming to the 
language of the treaties, Japan and Russia are not now 
expected to have troops in Manchuria, so their soldiers 
are given a different name. Both powers had until 
March, 1907, to complete the withdrawal of troops; but 
Japan chose for some time before that date to represent 
that she had completed the military evacuation, and that 
such troops as remained were not there in a military 
capacity. 

Under the limitation by the peace treaty to fifteen 
guards per kilometer of line, Japan has the right to keep 
not more than, fifteen thousand such guards in Manchuria. 
This estimate, however, includes only the former Russian 
lines, and the proposed line between Antung and Mouk- 
den, with a liberal allowance for spurs and side-tracks. 
But the Japanese authorities early displayed a disposition 
to stretch this limit by means of an unexpected complica- 
tion. During the war, for the uses of the army, a num- 
ber of what were then regarded as temporary railway 
lines were laid. These usually were of toy-like dimen- 
sions, often too frail for steam locomotion, the cars be- 
ing pushed by coolies or drawn by animals. Portions 
of the country were gridironed by these little roads, and 
after the army was withdrawn, many of them continued 
to be operated, and still are to some extent. Japa- 
nese were inclined to include the mileage of these roads in 
their estimate of the proper number of guards. It is 
true that prior to the expiration of the occupation inter- 
val the presence of a few thousands of Japanese troops, 



THE BALKANS OF THE EAST 175 

more or less, was of minor importance; but it is interest- 
ing to note the care then taken to create precedents for 
quibbles when the time for final adjustment comes. 

Perhaps the most significant part of the last treaty be- 
tween China and Japan is embraced in those supplei- 
mentary articles which deal with the restoration of Chi- 
nese political autonomy in Manchuria. It will be noted 
(Article 3) that Japan agreed, tentatively, to not wait 
upon final evacuation to begin this restoration; but to 
make the process gradual, as troops were withdrawn from 
various localities. A calculated effort, through Japanese 
news agencies, was made to show that this assurance was 
carried out, and that even prior to March, 1907, the 
greater part of Manchuria was administered by China. 
There is some foundation for this contention, but the in- 
formation so widely disseminated gives a very imperfect 
idea of actual conditions and the circumstances which at- 
tended them. 



CHAPTER XIV 

THE EVACUATION PERIOD 

Drift of Japan's Policy in Manchuria — Significance 
OF Internal Dissensions in Japan — Military and Civil 
Factions — Considerations Involved — Different Opin- 
ions, One Desire — The First "Opening" of Man- 
churia — General Oshima's Attitude — Marquis Sai- 
ONji's Visit — Shift of Japanese Headquarters — Real 
Situation at Moukden — The Viceroy's Position — His 
Excellency Practically a Prisoner — Visit of a Foreign 
Official to Moukden — Situation of Chinese Inhabit- 
ants — The Second "Opening" of Manchuria — Opposi- 
tion in Japan — Temporary Retirement of Viscount 
Hayashi — Partial Restoration of China's Autonomy — 
Further Negotiations. 

To get the drift of Japan's political policy in Man- 
churia since the v^ar ended, it is necessary to take a pass- 
ing glance at some incidents of internal politics in Japan. 
Owing to paucity of news from Japan, and the fact that 
a considerable part of news from there which Is dissem- 
inated abroad originates with the Government or corres- 
pondents subsidized by It, the western world does not 
always understand the Issues which animate political fac- 
tions there, or the significance of internal dissensions. 
When, therefore, soon after the war radical changes In 
the ministry occurred they caused but little International 
comment, and It Is probable that thousands of well-in- 
formed persons have never heard of them. Yet they 
were a result of long-growing differences between the 

176 



THE EVACUATION PERIOD 177 

military party in Japan and other elements In the- na- 
tional life. These differences, which had been suspended, 
by common consent, during the continuation of hostili- 
ties, again sprang into prominence when victory was as- 
sured, and it became necessary to consider plans for the 
future. Under the circumstances it was natural that mil- 
itary and naval influence would be very strong, but op- 
position forces soon revived sufficiently to make them- 
selves felt. In respect to Issues raised by the settle- 
ment of the war a wide, even fundamentally vital schism 
on a broad question of national policy soon developed. 
This schism Is about Japan's position In Manchuria. 
Many views are held by prominent statesmen, but, to at 
once strip the matter to the bone, the issue was drawn on 
the question of whether Manchuria shall be restored to 
China. 

It may be said that there was practically no divergence 
of desires In the matter; which means that almost all Jap- 
anese earnestly wish to keep the part of Manchuria now 
held by their Government, and perhaps hope In time to de- 
vise a way to do so. But opinions differed widely about the 
Immediate course to pursue. The purely military party 
wanted flatly to declare, as In the case of Korea, Japan's 
political and commercial paramountcy In southern Man- 
churia, trusting to Japan's strong military position and 
the general unreadiness of most powers which might be 
disposed to dispute the Issue to prevent any decisive oppo- 
sition. There Is little doubt that such a coup might 
have been at least temporarily successful. This is exactly 
what was done In Korea, and the powers obligingly con- 
sented to forget Japan's pre-bellum assurances regarding 
the Independence of that kingdom. 

But wiser and more far-seeing Japanese statesmen saw 
serious difficulties In the way of this- plan. The war 



178 THE FAR EASTERN QUESTION 

had impaired the national finances, and an ability to fur- 
ther borrow in western countries was necessary to any so- 
lution of the grave fiscal problems confronting the Gov- 
ernment, and resuscitation of its depleted material re- 
sources. To throw at once openly international prom- 
ises to the winds would almost certainly have isolated 
Japan among the nations, so far as active sympathy is 
concerned, and seriously crippled her financial credit. 
Conservative leaders pointed out that a nation cannot 
progress by war alone, and that Japan had already, for 
the moment, gone about her limit on that line. This 
briefly summarizes the main differences in Japanese coun- 
cils during the year which followed the end of the war, 
and discussion was none the less active because the outside 
world heard scarcely anything of it at the time. To have 
permitted it to become public that the Government was in 
doubt whether to fulfill its obligations in Manchuria 
would have at once centered upon it keen international 
suspicion, which pacific assurances and a moderate course, 
even if subsequently adopted, would have great difficulty 
in counteracting. Evidences of the crisis were plentiful 
at the time in the columns of the Japanese vernacular 
press, although censorship made such references extremely 
guarded. 

These differences of opinion led, early in 1906, to reor- 
ganization of the ministry, and Marquis Saionji became 
premier. The selection of Saionji seems to have been a 
compromise between the extreme military and anti-mili- 
tary wings. The extreme military party for the moment 
was checked, and a moderate course was adopted. Soon 
after his assumption of office. Marquis Saionji made a 
visit to Manchuria. Although no attempt was made to 
conceal the fact of his trip (which would have been im- 
possible), it was "unofficial," as Japanese put it, and no 



THE EVACUATION PERIOD 179 

prominence was given It In foreign news dispatches. 
While the premier doubtless took occasion to inform him- 
self first-hand about conditions in Manchuria, there is 
good reason to think that his chief object was to talk per- 
sonally with some of the military administrators, particu- 
larly with Viceroy General Oshima, and to urge certain 
political and financial necessities of the Government 
upon them. At this time differences between the ministry 
and military administrators In Manchuria had almost 
reached a state of open dissension. The ministry was 
urging a hastening of the military evacuation, and an os- 
tensible restoration of Chinese autonomy. In fact, the 
first of a series of announcements of the " opening " of 
Manchuria had already been circulated over the world 
by news services out of Tokyo. A disposition to become 
sceptically critical was beginning to appear in the West, 
Induced by complaints about conditions in the country. 
The military administrators In Manchuria, with the usual 
reluctance, as often exemplified by analagous conditions 
elsewhere, to relinquish their absolute rule, were strongly 
objecting to any modification of the situation. While he 
Is not known to have expressed himself publicly. It was 
understood In well-informed circles that General Oshima 
was strongly opposed to even an appearance of giving up 
the country; and in this, as I have indicated, he had the 
support of a powerful faction at Tokyo. The army holds 
the view that if it gets out of Manchuria now it will be 
forever, and this It regards as partial and useless dissipa- 
tion of the fruits of Its exertions and sacrifices. I pretend 
to no exact knowledge of what transpired between Salonji 
and Oshima, but It seems that a rupture narrowly was 
averted. It Is said that when SalonjI returned to Japan 
he carried with him Oshima's resignation, to take effect 
unless his (Oshima's) views were at least partly met. 



i8o THE FAR EASTERN QUESTION 

Some compromise evidently was reached, for Oshima re- 
tained command in Manchuria. Soon afterward, how- 
ever, he removed his headquarters from Liao-yang to 
Port Arthur, in Japanese leased territory. His title was 
changed from " Viceroy " to " Governor-General," and 
it was officially announced that he would thereafter ad- 
minister Manchuria under the direction of the Foreign 
Office. 

While this move was an outward defeat for the mil- 
itary party, its repulse was more apparent than real. 
The shifting of General Oshima's headquarters did not 
alter the real situation, for administration of Southern 
Manchuria remained in the hands of his military sub- 
ordinates. Although the greater part of the army had 
returned to Japan, detachments were stationed in the prin- 
cipal cities and towns. Unadulterated military rule still 
prevailed. As the number of troops was reduced the lo- 
cal Chinese civil authorities were permitted partly to re- 
sume their customary functions, still, however, under the 
direct supervision of Japanese. Eager as China is to re- 
gain her territory, her position is very delicate and re- 
quires the exercise of tact. The Chinese Government was 
during this period content to accept what was permitted, 
and while occasionally a hint was thrown out that less de- 
liberation in restoring her autonomy would be entirely to 
China's satisfaction, no disposition was shown to hustle 
or irritate Japan. 

The real situation well may be Illustrated by relations 
which then existed between the Japanese administrator at 
Moukden and the Chinese Viceroy of Manchuria, whose 
seat of government Is In the old Manchu capital. Soon 
after the Japanese occupied Moukden they removed the 
Tartar General who had held the position during the. Rus- 
sian occupation, and for a time no successor was appointed 



THE EVACUATION PERIOD i8i 

by the Chinese Government. After an Interval a new 
Viceroy was named, whose appointment, if it was not ab- 
solutely dictated by Japan, was subject to her veto. 
The new Tartar General entered Moukden with a cere- 
monial flourish, in which the Japanese military authori- 
ties participated. Once Inside his palace, however, he 
became practically a figurehead. Indeed, it is not too 
much to say that he was for a time a prisoner, as was 
demonstrated by a number of incidents which came under 
the observation of foreigners. 

The difficulties which were thrown in the way of for- 
eigners who desired to enter Manchuria after the conclu- 
sion of peace will be hereafter described, but some few 
exceptions were made to the rule debarring them. In the 
spring of 1906 the consular representative of a western 
power, stationed at Newchwang, was ordered by his Gov- 
ernment to proceed to some Interior points for the purpose 
of observing conditions and looking after property which 
belonged to Its nationals. After considerable delay, per- 
mission for him to make the journey was granted by 
Japan. On reaching Moukden the foreign official pre- 
pared to call upon the Tartar General. This was en- 
tirely proper, and to have failed to do so would have 
been a discourtesy. On intimating his Intention to Jap- 
anese officials who had him in charge, he was informed 
that the Chinese Viceroy was very ill and unable to re- 
ceive visitors. Not quite satisfied, the Consul-General 
quietly made some inquiry through Chinese sources, 
with a result that he received word that the Tartar General 
was quite well and very anxious to see him. He there- 
upon pressed his request upon the Japanese military admin- 
istrator, who finally gave an obviously reluctant consent, 
with the proviso that a Japanese officer should be present 
at the Interview. Under these circumstances the Consul- 



i82 THE FAR EASTERN QUESTION 

General saw His Excellency, who greeted him with pleas- 
ure, and expressed a wish to have a private conversation 
with him. This proved difficult to manage, owing to 
the presence of a Japanese officer, but the Viceroy suc- 
ceeded in communicating an impression of his relations 
with the Japanese. Later on the same day, when 
the Tartar General attempted to return the call of the 
Consul-General, he was arrested by Japanese soldiers and 
compelled to remain in the Yamen. A short time after- 
ward a consular representative of another western power, 
on a similar visit to Moukden, was unable to see the Vice- 
roy, receiving word through the Japanese administrator 
that His Excellency was too ill to receive visitors. This 
foreign official privately expressed the opinion after 
leaving Moukden that Japanese officials prevented the 
Tartar General from receiving him. It should be re- 
membered that these incidents occurred something like 
eight months after the war had ended, and after it had 
been announced from Tokyo that Chinese local autonomy 
in Manchuria was substantially restored. 

If the Japanese authorities assumed this attitude in 
dealing with one of the highest officials in the Chinese 
Empire, in the chief city and capital of Manchuria, and 
when the circumstances could hardly escape the notice of 
foreigners, one well may wonder what may have been the 
situation of Chinese officials of lower degree, located in 
remoter towns and villages, where foreign observers had 
not penetrated since the Japanese occupied the country. 
Many and bitter were the complaints made by local Chi- 
nese magistrates about certain methods of Japanese mili- 
tary administration, but until recently slight official atten- 
tion was paid to them. Meanwhile, the Japanese and 
Chinese governments, and representatives of both nations 
in Manchuria, were continually fencing with each other, as 



THE EVACUATION PERIOD 183 

conditions slowly shifted, In the effort to score points; the 
main object of China being to get the Japanese out of the 
country as soon as might be and on the best terms, while 
Japan endeavored to defer abandonment of her advan- 
tageous position, using It as a lever to reap all existing 
benefits and to force, if possible, a permanent continuance 
of them. 

While China was impatiently but somewhat passively 
waiting for Japan to notify her. In accordance with Ar- 
ticle 3 of the supplementary agreement, that the time had 
come for resumption of her autonomy in regions that had 
been evacuated, outside pressure to hasten the " opening " 
of the country began to be felt in Tokyo. I will not here 
discuss the reasons for and character of this pressure, which 
Is fully treated elsewhere, but it had the effect of causing 
another apparent turn of the wheel. On June i, 1906, a 
banquet was given at Moukden by the Japanese military 
administrator, and which was attended by the Tartar Gen- 
eral and his staff, when it was formerly announced, in an 
'fter-dlnner speech, that the military evacuation was com- 
pleted and that Immediate steps would be taken to restore 
administration of a large part of the country to Chinese 
officials, and that restrictions upon foreigners entering 
Manchuria would be removed. Again did the press of 
the world announce the glad tidings. But months passed 
and nothing was done, from anything that could be de- 
tected In Manchuria, toward carrying out this announce- 
ment. In fact. It seemed for a time that its fulfillment 
might be deferred Indefinitely; for It at once plunged the 
Japanese ministry into the throes of another Internal crisis. 

As long as the policy was merely to pretend to " open " 
that part of Manchuria under the control of Japan, while 
leaving the actual conditions comparatively unaffected, the 
discontent of the military party was somewhat assuaged, 



1 84 THE FAR EASTERN QUESTION 

and its leaders were persuaded to countenance outward 
concessions to international expediency. But really to 
turn over any part of the country to the Chinese was felt 
by the military administrators to give ground which might 
never be recovered. So they rallied their partisans at 
Tokyo and the fight raged afresh. Little was permitted 
to leak out of the council chamber, but the crisis had, 
nevertheless, some significant manifestations. When it 
was announced that Viscount Hayashi, Minister for For- 
eign Affairs, had taken a vacation from his official duties, 
some native newspapers commented upon the matter. 
One of the leading Japanese vernacular journals had this 
to say: 

" Various rumors are In circulation as to the actual 
cause of Viscount Hayashi's temporary retirement, it be- 
ing widely believed that he has been forced to retire ow- 
ing to the situation In the cabinet. A Tokyo dispatch to 
this paper states that Viscount Hayashi's indisposition is 
of so slight a nature that he cannot be said to be ill, nor is 
it at all necessary for him to absent himself from his of- 
ficial duties on that account. Viscount Hayashi Is stated 
to have quoted his medical adviser's opinion that he should 
relieve himself of all business and take care of his health; 
otherwise the consequences would be serious. The large 
amount of important diplomatic business in the course of 
negotiation at the present time may account for Marquis 
Salonji assuming the control of foreign affairs ; but certain 
circumstances suggest that the present leave of absence 
granted to Viscount Hayashi is merely the forerunner of 
his resignation. The strained relations between the civil 
and military parties In the cabinet — which led to the 
resignation of Mr. Kato, Viscount Hayashi's predecessor 
— continue to cause friction, especially in reference to the 




New Japanese Administrative Building, Moukden. 




A Fete in the Japanese Settlement, Moukden. 



THE EVACUATION PERIOD 185 

opening of Manchuria. Consequently, the settlement of 
every question — even though it concerns Great Britain 
or the United States — involves a disagreement between 
these conflicting parties, a state of affairs which has great- 
ly harassed Viscount Hayashi as Foreign Minister. 
Moreover, the diplomatic negotiations with China have 
not proceeded so swiftly or satisfactorily as could be de- 
sired, and finding the outlook hopeless in his embarrass- 
ing position Viscount Hayashi is said to have resolved to 
quit office on the plea of ill health." 

To those who have regarded political Japan as a happy 
family, harmoniously bending its energy for the national 
good, this Intimation of the internal disagreements com- 
mon to all governments may come as a surprise. From 
what I know of Japan, inside and outside, I am convinced 
that western knowledge of darkest Russia is as the noon- 
day sun to the moon compared to general western under- 
standing of internal forces which sway the policy of Nip- 
pon. The Russian official sphynx is garrulous in com- 
parison with his eastern neighbor and erstwhile foe. In 
no other country which pretends to broader civilization is 
news about national affairs which is sent out for publica- 
tion abroad so effectually controlled by the Government 
as in Japan. 

Whatever may be the whole truth about this crisis, the 
conservative party for the time held its position, and the 
policy of moderation and expediency was kept to the fore. 
On August I, 1906, the Japanese military administrator 
at Moukden gave another banquet, to which principal 
Chinese officials were invited; when he announced that on 
that date Japanese military administration of Moukden 
would terminate. During the proceedings attention was 
called, in an address read In Chinese, to the alleged fact 



1 86 THE FAR EASTERN QUESTION 

that while Japan was hving up to her promises, had com- 
pletely evacuated the country and was now restoring Chi- 
nese autonomy, the Russians further north, although un- 
der similar obligations, had withdrawn only part of their 
forces; the obvious moral being that Japan was the real 
friend of China. What the Tartar General and his sub- 
ordinates who were present thought of these assurances 
is not known, but the function passed harmoniously. A 
few days afterward the Japanese military administrator 
departed from Moukden with his staff, and went to Port 
Arthur, after turning over to the Japanese Consul-Gen- 
eral at Moukden the care of Japanese subjects and inter- 
ests. The Japanese guards were withdrawn from the 
Yamen and the city gates, and were replaced by Chinese 
troops and police. Here, then, was tangible evidence of 
an intention to restore Chinese authority, and Chinese of- 
ficials were for a brief while greatly encouraged. 

But they soon discovered that in practice there was 
little real difference between Japanese military administra- 
tion and Japanese consular supervision, backed by the same 
military force. It developed that Chinese officials could 
do nothing of importance without " consulting " the Jap- 
anese Consul-General, who remained the real authority. 
Beside this, the so-called restoration was so narrow in Its 
territorial application as to confer little more than per- 
sonal liberty to the Tartar General Inside the city of 
Moukden. At the same time when Moukden was *' re- 
stored," similar steps were taken at Liao-yang, Tieling 
and some other minor places in the Interior, which gave a 
casual Impression that the restoration was general through- 
out the country. But when the Tartar General prepared, 
in 1906, to make a trip for the purpose of ascertaining 
conditions and the situation of Chinese subjects, he was 
privately " advised " by the Japanese Consul-General to 



THE EVACUATION PERIOD 187 

remain in Moukden, and did so. It is true that this was 
subsequently made to appear as the act of the Chinese 
Government, and it was announced at Peking that the 
Viceroy's journey would be deferred; but there is no doubt 
that diplomatic pressure was brought to compel this an- 
nouncement, and meanwhile the Japanese kept the Tartar 
General cooped up in Moukden. The truth is that while 
not kept under quite as rigid surveillance as formerly. His 
Excellency was little more than an unwilling puppet in 
the hands of the Japanese. 

At intervals after the signing of the convention of 
1905, which is obviously and admittedly incomplete, there 
were negotiations at Peking between Mr. Hayashi, the 
Japanese minister, and the Wai-Wu-Pu, with a view to 
adjusting the many matters left open by or entirely omit- 
ted from the existing agreement. Apparently almost no 
progress was made, although necessity for expedition 
grew as time for final and complete evacuation of Man- 
churia by the former belligerents drew near. Each nation 
blamed the other for the seeming deadlock, bringing 
contra-charges of dilatory methods: and probably the truth 
is that both were in a measure responsible. Both nations 
were feeling their way, realizing that they alone or to- 
gether cannot entirely settle all issues that may be raised. 
But there are many questions, however they may affect 
other interests, upon which some kind of an understanding 
must be reached between China and Japan before condi- 
tions In Manchuria can be established upon a stable basis. 
A majority of these questions grow out of purely local con- 
ditions, and are results of the war and some phases of the 
military occupation. Their equities may, therefore, best be 
got at by examination of some of the elements involved. 



CHAPTER XV 

PROPERTY RIGHTS IN MANCHURIA 

A Puzzling Question — Japanese Rights Inherited 
From Russia — The South Manchurian Railway — 
Mines and Other Concessions — Additional Requisitions 
BY THE Japanese — Validity of Titles in Dispute — Japa- 
nese Settlements — The Case of Antung — Seizure of 
Land — Methods Employed — Monopoly of Facilities 
— The Case of Newchwang — Civic Improvements — 
A Speculative Project — Confiscation of Rights — Use 
of Chinese Revenues — Acquisition of Chinese Private 
Property — Japan's Moral Shift — Bearing of These 
Propositions Upon China's Sovereignty — The Yalu 
Timber Industry — A Deadlock. 

One of the complex and puzzling questions which grew 
out of Japanese and Russian occupation of Manchuria re- 
lates to property rights under the new status. These al- 
leged rights vary greatly in character, but a majority con- 
sist of real estate and other vested interests. For pur- 
pose of classification they may be discussed under two 
heads — Rights or interests which the Japanese claim to 
have inherited from the Russians, and rights and interests 
which they claim to have acquired since their occupation 
of the country. V^hen rights which have been inherited 
from the Russians are mentioned one naturally thinks of 
the South Manchurian Railway (Chinese Eastern Rail- 
way), which is provided for in the treaty. But the rail- 
way and Kwang-tung lease by no means limit Japan's 

i88 



. PROPERTY RIGHTS IN MANCHURIA 189 

claims, and some of them present extremely interesting 
phases. 

Beside the railway, Japan claims that all concessions 
formerly held by Russia revert to her, and has established 
herself in possession of them. They chiefly consist of 
mining and timber concessions, and while their value is 
not definitely known, it is believed to be considerable. 
Even before peace was declared mining experts in the em- 
ploy of the Japanese Government were set to work in 
southern Manchuria and along the upper Yalu, to make 
an examination of the mineral resources of the country. 
After hostilities ended this prospecting was continued on 
a wide scale. Not only are all mines formerly opened or 
prospected by the Russians in southern Manchuria now 
in the hands of Japanese, but also are many to which 
the Russians never made a claim. During Russian oc- 
cupation, beside land and buildings purchased from Chi- 
nese residents of the country, much real property was oc- 
cupied under circumstances which savored strongly of ap- 
propriation. Such actions of the Russians were strongly 
criticised by the Japanese press and Government, and the 
moral need for someone to intervene in behalf of the Chi- 
nese was pointed out. The Chinese people and author- 
ities also protested at these actions, and succeeded in a 
number of instances in compelling restitution, or securing 
payment for the owners. Much of such property fell 
into the hands of the Japanese when they expelled the 
Russians, and the former owners were for a while rejoic- 
ing at the prospect of getting their own back again. In 
many instances where Russians held title to property, val- 
idity of the deeds was disputed, it being alleged that when 
other means failed to induce an owner to sell coercion 
was resorted to. These charges against the Russians 
were widely published before the war, and while they 



190 THE FAR EASTERN QUESTION 

usually were exaggerated they were by no means destitute 
of truth. Now the shoe is on another foot, and the 
Japanese Government shows a disposition to claim as a 
legitimate inheritance what it formerly objected to Russia 
taking. Japan's argument seems to be that the robber's 
spoils belong to the man who drives him off. And in re-i 
gard to some former Russian concessions, Japan is in- 
clined to stretch them farther than the Russians them- 
selves ever attempted to do. 

Far from building any hopes of a general recovery, 
through Japanese occupation, of Chinese property appro- 
priated outright or under various subterfuges by the Rus- 
sians, the unfortunate residents of Manchuria now find 
themselves confronted by a similar and far greater acqui- 
sition of public and private property by the Japanese 
themselves. In matter I have formerly published about 
conditions in this country,^ I thoroughly discussed the suf- 
fering and annoyance to which the Chinese population 
was subjected by the military authorities during the war, 
and need not review them here. Fortunately, the gener- 
al situation of native residents is much ameliorated since 
the establishment of peace, and the more tragic elements 
have almost disappeared. But reminders of that gloomy 
period remain, and one of these takes root in the manner 
by which titles to property now claimed by Japanese were 
acquired. It is not feasible here to give many examples 
of how this system has worked, and in selecting a few il- 
lustrations I take cases which directly involve the Japan- 
ese Government, through its administrators, and which 
may, by sometime becoming the subject of international 
arbitration, have attention concentrated upon them. 

As a case of this kind I select that of the Japanese set- 
tlement at Antung. This town, which is situated near the 
mouth of the Yalu river, was almost the first place In 

1 The New Far East, 



PROPERTY RIGHTS IN MANCHURIA 191 

Manchuria to be occupied by the Japanese army. For 
more than fifteen months before the war ended, it was un- 
der Japanese administration. Its commercial importance 
has long been recognized, and before the war the eJEforts 
of John Hay resulted in having it declared a treaty port 
by China, and an American consul was appointed to the 
post. Owing to the war, however, the position was unoc- 
cupied until 1908, leaving Japan for several years the 
only nation represented there. Soon after the Japanese 
army occupied Antung, early In 1904, steps were taken 
to create a Japanese settlement. A large plot of ground 
Immediately adjacent to the Chinese city was laid out for 
a town and surrounded by a wall. When the war ended 
an apparently thriving settlement was already established, 
with shops and other activities that usually are to be found 
In Japan. Also It was found that practically all river 
front available for godowns and shipping purposes had 
been secured by Japanese. These things are not in them- 
selves objectionable, but there were some complaints by 
other foreign firms that had contemplated establishing 
themselves there; and Japan Is open to the criticism of 
using her military control of the country to get everything 
worth having while her regulations kept competitors out. 
Nearly the whole of this property is now In dispute. 
The Japanese Government wants the Chinese Govern- 
ment now to perfect the titles, which was not practicable 
during the war, and the Chinese Government hesitates to 
do so on the ground that transfers of much of the land 
were, It Is asserted, secured by coercion and fraud, and 
without co-operation of Chinese local officials. To this con- 
tention the Japanese reply that the land was regularly pur- 
chased from the proper owners, and paid for. This seems 
to be true In a prima facie sense ; but many former owners 
now assert that they were forced to part with their prop- 



192 THE FAR EASTERN QUESTION 

erty, and that they did not receive the money appropriated 
by the Japanese Government to pay them. Extraordinary 
as these assertions may seem to people who reside in highly 
civilized communities, and who have never had the misfor- 
tune to live in the path of war, there was much in the 
known conditions in Manchuria at the time most of this 
property was acquired to give plausibility to the evidence 
of former Chinese owners. An official of the American 
Government, who investigated the situation at Antung 
soon after the war, was informed by the Japanese authori- 
ties there that a fair price was paid for all land then held 
by them, or by Japanese subjects, and the prices quoted, 
while not representing ordinary values, might be con- 
sidered equitable remuneration at the time the property 
is alleged to have been bought. It is probable that many 
Chinese owners sold willingly; but there is strong evidence 
to show that some of them parted with their property 
with reluctance. The usual method seems to have been, 
with recalcitrant or reluctant owners, to employ an inter- 
mediary not connected with the Japanese military adminis- 
tration. Frequently these intermediaries were Chinese or 
Japanese who were attached to the Japanese administra- 
tion as spies and informers, and who exercised a sinister in- 
fluence among the people. Former owners now assert, 
since they have been able to learn the prices which Jap- 
anese claim to have paid, that in many cases intermedi- 
aries gave the owners but a tithe of the actual purchase 
price, pocketing the difference themselves or sharing it with 
petty Japanese officials, and if mulcted Chinese suspected 
that they were being robbed they dared not complain. 
The land thus in dispute at Antung embraces about five 
square miles, includes the railway station and yards, the 
Japanese settlement and the best of the river front. 
A similar case Is at Newchwang. This treaty port. 



. PROPERTY RIGHTS IN MANCHURIA 193 

which was the only one fully opened in Manchuria when 
war began, has, consequently, a somewhat peculiar po- 
sition. Although the city was occupied at times by the 
military of both belligerents, foreign consular represen- 
tatives remained at their posts through the war, as did 
the greater part of the small foreign population. A re- 
sult of these conditions was that both Russian and Jap- 
anese authorities were more careful of their actions than 
was true elsewhere In the country, for whatever they 
did was observed and reported to other governments, and 
there was no way of preventing news from going out. 
Moderate action was therefore the rule in Newchwang 
under both military regimes, and illustrations taken from 
there reduce probability of exaggeration to a minimum. 

When the Russian Government built a branch of the 
Chinese Eastern Railway from Tashihcha to Newchwang, 
the Newchwang terminus was placed on the river bank 
nearly three miles above the city, where a small village 
grew up around the station. When the Japanese occupied 
Newchwang, they established a large army base at the rail- 
way station. As the land previously occupied by the Rus- 
sians was not sufficient for Japanese purposes, large addi- 
tions were requisitioned by the army, and sheds and go- 
downs built upon them. When, as time passed, probabil- 
ity of Russian reoccupatlon vanished, the Japanese author- 
ities began extensive improvements. A macadamized road 
several miles long was built from the city to and beyond 
the railway station, with brick drains and curbing. At 
the time when construction of this road was commenced, it 
was spoken of as a military necessity and so regarded by 
foreigners In Newchwang, although Its evidently perma- 
nent character caused comment. But when, after peace 
was declared, work on the road was continued and 
extended; and the whole of the large tract lying between 



194 THE FAR EASTERN QUESTION 

the city and the station, by the river, was laid out in cross- 
streets along which a Japanese settlement began to spring 
up, the intent of the plan became clear. It then devel- 
oped that during the war Japanese had acquired almost 
all land about the station and lying between It and the 
city. Japanese officials contend that this property was 
secured by ordinar}' purchase. But, as at Antung, many 
former owners now claim that coercion was used to induce 
them to sell. 

It is not easy to get at the entire truth of this matter. ^ 
Investigation of circumstances attending these transfers 
clearly shows, as at Antung and other places, that some 
property was seized by Japanese under militars' law, with- 
out consulting the wishes of owners; and after hostilities 
ended former owners practically were compelled to accept 
such remuneration as was offered, or run the risk of get- 
ting none at all. On the other hand, it seems that some 
Chinese owners sold their land willingly, and were satisfied 
with prices which they received. Before the war most of 
this land had small value, either actual or prospective, and 
usually was held at low prices. Taking values as they 
were when Japanese took oVer tills property, the stated re- 
muneration seems reasonable, assuming that the real own- 
ers got the money, and that prices given are correct. But 
since the improvements inaugurated by Japanese author- 
ities have fully developed (these Include — besides roads 
and streets — street lamps, and water-front facilities) 
property In the locality has greatly advanced, and some of 
It Is quoted at ten to twenty times Its former value. 
Some property for which Japanese state that they paid 
twent\--five taels (about $17.00) a mow (about 1-5 acre), 
has since been quoted at 1,000 taels a mow; and while 
these values seem Inflated, some lots are said to have 
changed hands at this price. 



. PROPERTY RIGHTS IN MANCHURIA 195 

This whole movement Is analogous to a common kind 
of real estate speculation in America, where likely prem- 
ises adjacent to cities are laid out In building lots, streets 
and other civic improvements made, and settlement in- 
vited. It now seems clear that this plan was contem- 
plated by Japanese administrators, if not from the be- 
ginning, from the time when It became evident that 
Japan was to remain In temporary possession of southern 
Manchuria. While some land owned by other foreign- 
ers was occupied by Japanese for military uses, no disposi- 
tion was shown not to reimburse such owners, and 
repair damages, although such reparation, does not al- 
ways entirely satisfy owners. It also seems likely that 
some former Chinese owners, who may have sold their 
property willingly, now realize that they were worsted 
in a speculative sense, and in their discontent bring accu- 
sations against the Japanese authorities, out of spite, 
which cannot be substantiated. In the whole affair Jap- 
anese authorities have managed to preserve outward reg- 
ularity, though the circumstances, when Investigated In 
detail, throw strong suspicion upon the methods em- 
ployed. The real issue of the controversy is whether 
Chinese owners were coerced Into selling their property. 
In many cases, it now appears, where a group of Chinese 
objected to selling at the price offered, the matter was taken 
up between Japanese authorities and the local guilds, and 
adjusted by compromise. Conditions which surrounded 
relations of Japanese military administrators to the Chi- 
nese functionary bodies do not, however, justify any 
great assurance In the equity of this plan. It is known 
that some prominent guild leaders, then under serious 
charges or imprisonment by the military authorities, had 
such disabilities apparently removed after meeting the 
views of Japanese officials In this and other matters; and 



196 THE FAR EASTERN QUESTION 

it is also known that some of these Chinese were open 
and silent partners in large contracts growing out of these 
improvements, and which were at the letting of Jap- 
anese authorities. And it is positively known that some 
higher Japanese officials were personally interested, in a 
financial way, in the speculation involved by the scheme 
as a whole. 

The visible improvements which are the result of all 
this will impress any visitor to Newchwang, and the 
press of the world, duly notified by the Tokyo news serv- 
ice, favorably commented upon the benefits of Japanese 
administration. The benefits are obvious enough, looked 
at only from the standpoint of what has been accom- 
plished. But action of the Chinese Government, in rais- 
ing this issue of property rights in connection with the 
negotiations with Japan, calls attention to a matter of 
considerable pertinence. It appears that the money used 
in making these improvements at Newchwang and else- 
where was largely derived from the customs revenue at 
Newchwang and local revenues there and elsewhere. To 
elucidate this phase of the question It is necessary to state 
that when Japanese military authorities took possession 
of the port, after Its evacuation by the Russians, they 
also took general control of the custom house. Few 
changes were made In the personnel of the customs staff, 
which was at that time and for long after under Mr. 
Edward Gilchrist, an American, and who was succeeded 
by Mr. Clark, also an American. The Chinese customs, 
as is generally known, are pledged to satisfy foreign claims 
upon China's revenue; and are administered by a foreign 
board of which Sir Robert Hart is the nominal head. So 
to have interfered materially with outward administration 
of the Newchwang custom house would have aroused in- 
ternational susceptibilities. 



PROPERTY RIGHTS IN MANCHURIA 197 

Collection of customs revenue at Newchwang went on 
as usual under Japanese administration, but there seems 
to have been a serious divergence from the usual method 
of disbursement. The Chinese Government asserts that 
many public improvements undertaken at Newchwang by 
Japanese were paid for out of customs and local revenue, 
and that this money also was used to purchase some of the 
land which now constitutes the new Japanese settlement. 
In negotiations pending, for the purpose of adjusting mat- 
ters at issue concerning Manchuria between Japan and 
China, Japan has announced that she expects to retain that 
part of customs and other revenues collected under her ad- 
ministration and which was spent for public purposes, such 
as roads and sanitation. As by far the greater proportion 
of such expenditure, so far as I was able to discover, was 
upon roads needed at the time for Japanese military use 
(although some now are convertible to public use), and 
upon improvement of actual or proposed Japanese settle- 
ments, which Japan now insists that China recognize as 
permanent and extra-territorial, it will be seen that Ja- 
pan's diversion of local and national Chinese revenues was 
not entirely altruistic. China has protested that she can- 
not consent to retention by Japan of revenues pledged for 
general indemnity due to several nations, nor can she 
recognize the validity of expenditure by Japan of local 
revenues in the purchase of land at an arbitrary price for 
Japanese use and occupation. 

Conditions as Illustrated by property disputes In An^ 
tung and Newchwang are universal. In some degree, 
throughout all parts of Manchuria where Japanese mili- 
tary administration has been and is applied. Not only 
has the Japanese Government, through its regular officials, 
acquired, under equivocal circumstances, a large amount 
of what formerly was Chinese public and private prop- 



198 THE FAR EASTERN QUESTION 

erty; but hundreds of instances are known where Japan- 
ese subjects have been supported by Japanese officials 
in acquiring Chinese property against protests of the 
owners. Indeed, some of the cases of this nature which 
were brought to my attention, through rehable sources, 
show a disregard of hiw anci equity that constitutes a re- 
proach upon those officials who permitted such incidents 
to occur. 

In regard to Japan's contention that she inherits all 
privileges, concessions and property formerly held by Rus- 
ria, China again takes issue with her; pointing out that 
many of Russia's alleged privileges and property rights 
never were recognized as valid by China, but, on the con- 
trary, were strenuously disputed. In this category China 
places (the specific exceptions have not', so far as I know, 
been made public, but I am informed by a high Chinese 
official in close touch with the negotiations) all coal and 
other mines formerly operated and claimed by Russia, 
and much of the real estate included by and adjacent to 
former Russian settlements along the railway. It is 
somewhat amusing to see Japan, by her position in this 
matter, assume an attitude of championing the actions of 
Russia which she formerly complained of, and upon which 
she baseci her chief reasons for going to war. The im- 
portance of this question to China is far greater than the 
issue involved in the value of this property which lies 
south of the line of present division between Russian and 
Japanese spheres in Manchuria. It should be remem- 
bered, though I am now confining the discussion to rela- 
tions between Japan and China, that very similar issues 
must be adjusted with Russia regarding a far larger part 
of Manchuria. If China reaches an agreement with Ja- 
pan by which she concedes Japan's right to inherit these 
desiderata of the former Russian regime, it will be diffi- 




The Hospital, Japanese Settlement, Newchwang. 




»!♦.-» 




Street in Japanese Settlement, Newchwang. 



PROPERTY RIGHTS IN MANCHURIA 199 

cult, if not impossible logically to refuse to recognize 
Russia's similar claims in regions farther north. In 
much advocacy that I have noticed in the western press, 
in favor of granting Japan a generous allowance in Man- 
churia to compensate her for sacrifices in the war, it 
seems to have been entirely forgotten that Russia still 
occupies two-thirds of the country, under precisely the 
same terms as Japan, and that such arguments, in effect, 
tend to support Russia in pressing the retention of the 
status quo respecting herself. 

Property disputes between Japanese subjects and Chi- 
nese residents of Manchuria, of which there is an enor- 
mous number, while presenting fewer elements of inter- 
national friction than similar controversies of their gov- 
ernments, possess considerable humanitarian interest. 
There is too much disposition in the West, it seems to 
me, to ignore, in discussing the recent war and its results, 
its effects upon Chinese inhabitants of this region. Rep- 
resenting the greatest human factor in the issues at stake, 
they apparently are regarded in many quarters almost as 
a negligible quantity, to be considered only after more 
important matters are disposed of. 

Of the innumerable cases where Chinese claim to have 
been forcibly and wrongfully deprived of their property, 
one of considerable importance refers to the timber in- 
dustry along the Yalu river. Those who followed the 
diplomatic recriminations which immediately preceded 
the late war may recall that alleged improper Russian 
aggressions in the Yalu timber region was made a ground 
of complaint by Japan. It was contended by Japan that 
Russian claims to timber concessions on both banks of the 
Yalu were, in effect, fraudulent, and constituted a direct 
and further aggression upon both Chinese and Korean ter- 
ritory which Japan could not tolerate. To some it may 



200 THE FAR EASTERN QUESTION 

seem unnecessary to thus, in presenting cases for illustra- 
tion, so frequently revert to their political antecedents ; but 
the astounding rapidity, particularly in regard to Japan, 
that pre-bellum attitude and assurances are being rele- 
gated to oblivion in favor of new and constantly shifting 
premises, seems to justify keeping the old arguments 
in mind in this discussion. Japan has not here, as in 
other places, absolutely demanded the timber concession 
in Manchuria formerly claimed by Russia ; but she caused 
to be inserted into the supplementary agreement to the last 
convention with China ^ (Article lo) a clause providing 
for organization of a company to exploit forests on 
the right bank of the Yalu, the Korean side now being 
absolutely controlled by Japan. Long before this agree- 
ment was signed Japanese had taken possession of the 
properties in question, and have since been using them as 
their own, regardless of wishes of the Chinese; and the 
j clause referred to seems designed to give a color of legality 
to Japan's past and present actions. 

When the Japanese army occupied the Yalu country, 
the military authorities at once took possession of this 
industry. At that time there was a large quantity of cut 
logs lying in the river, and these were seized. Since 
then the business has been carried on by Japanese, it be- 
ing the chief source of supply for timber and lumber 
needed for constructing military railways, fortifications 
and other requirements during and since the war. It now 
appears that Chinese who owned these logs and lumber, 
and whose business arbitrarily was taken out of their 
hands, have not been able to secure a full settlement. 
They demand payment for lumber and timber used, and 
restoration of the property to their own management. 
During the four and a half years since Japanese seized 

^ Appendix C. 



PROPERTY RIGHTS IN MANCHURIA 201 

these properties, several serious disturbances growing out 
of the matter have occurred. On one occasion when Chi- 
nese refused to turn over a quantity of lumber and logs, a 
detachment of Japanese troops fired upon them, killed a 
number of the Chinese, and seized the property. On an- 
other somewhat similar occasion Japanese troops were 
sent to disperse recalcitrant Chinese, but no bloodshed re- 
sulted. Japanese authorities have claimed that Chinese 
demand too high a price for timber and lumber that 
was consumed, while Chinese claim that the Japanese 
offer too little. So a deadlock resulted, which must be 
settled in some way by the respective governments. 
Meanwhile Japanese retain complete supervision of the 
industry. Tentative attempts have been made to satisfy 
Chinese interested in the timber business in the Yalu 
region, by offering to include them in a corporation to be 
organized under the terms of the treaty; but the Chinese 
apparently do not want to be included in the proposed 
company, which they fear will be conducted by Japanese 
chiefly for their own profit. The commercial reputation 
of Japanese in the East Is such that most people other 
than Japanese hesitate to become associated with them 
in enterprises except under conditions which Insure equity 
and honest administration. When pressed to restore the 
timber business on the Yalu to Its former status, now that 
the war Is over, the Japanese state that they are awaiting 
organization of the company which Is to have the conces- 
sion, under the terms of the treaty, and that refusal of Chi- 
nese to cooperate alone prevents progress. 






h -. '-^ s-of • 

II' 'I 






CHAPTER XVI 

THE OPEN DOOR IN MANCHURIA 

Commercial Aspects of the Military Regime — Russia 
Not an Aggressive Factor — Japan's Commercial Activity 
— Part Played by Japanese Immigrants — Attitude of 
Japan — The Exploitation of Manchuria — Japan's Pro- 
prietary Tone — TjeulUQpen Door " — Elements Involved 
— Conditions Affecting Incoming Commerce — Japan's 
Control of Transportation Facilities — Use of Japanese 
Shipping Lines — Encouragements to Japanese Trade — 
Japan's Assumption of Sovereignty — International In- 
teb-ests-Aef-ectjed — Japan's Denial of Alleged Discrim- 
inations. 

Although political circumstances which attend the oc- 
cupation of Manchuria by Japan and Russia are of great 
international importance, and must in time determine the 
condition and status of all activities within the country, 
some commercial aspects of the military regime have 
extraordinary significance to trading nations interested in 
the future of the Far East. As Russia is not, at least 
just now, an aggressive commercial power, and her pres- 
ence in northern Manchuria Involves no substantial 
difference from the situation during years which pre- 
ceded the late war, here again the chief Interest lies in 
actions of Japan. And of unusual features presented 
by new commercial activities of Japan, at home and 
throughout the East, none is so Immediately significant, 
particularly to America, as that illustrated by some phases 

202 



. THE OPEN DOOR IN MANCHURIA 203 

of what was done here during the period when Japan's 
authority was absolute. 

The beginning of Japan's direct commercial activity 
in Manchuria did not wait upon conclusion of the war. 
When before hostilities terminated it was pointed out that 
thousands of immigrants and commercial agents were 
tramping upon the heels of Japanese armieS;, It was 
asserted In some quarters that these persons, whose pres^- 
ence It was said was only temporary, were connected with 
the military operations, and had nothing to do with a 
calculated commercial policy of the Japanese Govern- 
ment. If such assertions ever had any plausibility, it long 
ago vanished. The year that followed the making of 
peace revealed this movement, beyond possibility of equiv- 
ocation, in its true light. There Is no longer any attempt 
to conceal reasons for the presence of these immigrants, 
and the Japanese Government, by many official acts and 
utterances, has declared Its purposes and intentions In 
terms so plain that they are clear even to casual inspection. 

In the effort by Japan to capitalize her victory over 
Russia, and make It a means of starting the nation upon 
a career of Industrial and commercial prosperity, an im- 
portant place was assigned to Manchuria. Optimistic 
propaganda concerning the future of the Empire that was 
wide-published In Japan and throughout the world prom- 
inently represented Manchuria among the new assets. 
Care was taken In most of this comment to refrain from 
openly asserting proprietary interest, but many Japanese 
journals and some semi-official utterances have, in disr 
cussing imperial possibilities, treated China's provinces 
as already being, In practical effect, an adjunct of Japan. 
It was taken for granted In such comment that it is foi^, 
Japan to decide upon the future of southern Manchuria,! 
and that no Interference with her decision will be tol-1 



204 THE FAR EASTERN QUESTION 

erated. Within the last year, since attention of the 
western world has been more definitely attracted to con- 
ditions in Manchuria, the Japanese official press has 
quit its proprietary tone in speaking of the country; but 
at the time of which I am now writing that tone habitually 
was employed, 

Japan's design commercially to exploit Manchuria is 
part of a general plan embracing Korea, the home domin- 
ions and other parts of the East, the scope of which has 
already been Intimated; but It will here suffice specifically 
to mention only those methods which are designed to 
apply specially In this locality. 

Among factors applicable to development of the for- 
eign commerce of any nation, beside purely Internal ele- 
ments, are means for getting goods to a proposed mar- 
ket, and conditions under which they may enter that 
market; or. In other words, transportation and such 
regulations affecting trade as customs and other tariffs. 
It has often been pointed out, by students of Japan's 
industrial and economic position, that her geographical 
location gives her great advantage over western nations 
In trade with China and Korea in the matter of trans- 
portation; and some have contended that this advantage 
will offset certain handicaps which she always must, ap- 
parently, unless she acquires extensive continental pos- 
sessions, labor under. Under these circumstances It was 
thought by many that Japan could afford to forego dis- 
criminations In her favor in entering the continent, and 
this alleged fact tended to diminish western commercial 
uneasiness In regard to portions of Asia falling tem- 
porarily or permanently under her control. Japanese 
commercial enterprises In Manchuria during and since 
the war throw light upon these questions, and perhaps 
afford a basis for some conclusions as to the real purport 




Timber Rafts on the Yalu River. 




Scene in Chien-tao, a Section of Manchuria Adjoining Korea, 
AND WHICH IS Occupied by Japanese. 



THE OPEN DOOR IN MANCHURIA 205 

of her policy. In examining matters which bear upon 
them, illustrated by their application to Manchuria, it may 
be better to take up the item of transportation first, as it 
is entirely controlled by the Japanese Government, and for 
a long time after the war ended was practically unaffected 
by outside influence or action. 

During the war with Russia the great Japanese ship- 
ping companies chiefly were employed in transporting 
troops and munitions of war to the scene of hostilities; 
and when hostilities ended the return of the armies to 
Japan provided business for a considerable time. But 
after the war, with the tide of transport setting, for the 
first time in eighteen months, almost entirely toward Ja- 
pan, the shipping companies found their boats returning 
to Manchuria with light cargoes or none at all. Special 
inducements, with direct encouragement and frequent as- 
sistance of the Government, were offered to Japanese 
desiring to emigrate to Manchuria. Rosy reports of 
prospects there were circulated in Japan, and this and 
the low rates offered had a material effect in swelling 
the tide of emigration. It Is known that many of these s ^ 
emigrants of certain classes, particularly tradesmen, were ;! 
given transport for themselves and belongings; the \\ 
presumption being that where such persons were carried 1 
free the Government in some way compensated the ' ' 
shipping companies. Several special excursions were 
made, thousands of so-called students given a free trip ! 
to Manchuria, and opportunity to remain there If they 
wished. Although some effort was made to induce 
a good class of emigrants to take advantage of these 
offers, the average, judging from those to be seen In Man- I 
churia. Is very poor, falling under normal social level 
In Japan, and giving some ground to the charge that 
Japan has been making Manchuria and Korea a dumping 



2o6 THE FAR EASTERN QUESTION 

ground for her undesirable elements. So strong at 
times were these complaints, that many Japanese were 
deported by the military authorities, and sent back to Ja- 
pan. But enough to make a distinct Impression upon the 
commercial life of the country have remained. 

The chief use to which Japanese shipping companies 
were put was in bringing Japanese goods to Manchuria. 
These goods have been brought under various condi- 
tions, shifting as the country evolved from a war status. 
In the beginning it appears that Japanese traders, or some 
of them, were charged a low rate of freight on their 
merchandise; but when even with this help they failed 
to prosper as the Government wished, and showed signs, 
of discouragement, steps were taken to give them further^ 
assistance, and firmly to establish Japanese commerce on! 
a definite basis. The Government called some prominent; 
financiers and merchants Into consultation, and a some- 
what extraordinary programme was advanced. This pro- 
gramme was fully discussed by the Japanese press, and 
some of its details formulated Into ofiicial gazettes. For 
purpose of directing, under the Government, an energetic 
campaign to monopolize the foreign trade of Manchuria 
(for no secret was made of the object of the scheme), 
what Is known as the A;j[.anchurla Export Guild was formed 
In 1906. It Included most of the greater commercial 
guilds in Japan, such as the Osaka Bosekl, Mlye Boseki, 
Kanakin Seishoku, Tenima Ormomo and the Okayama 
Bosekl. It was announced that Mitsui & Company were to 
act as general agents for the guilds and the Government, 
through its branches In Manchuria; and the Yokohama 
Specie Bank, the Government's fiscal agent in Manchuria, 
was to lend Its cooperation. These details are significant, 
for the Imperial Household of Japan owns an Interest In 
the Nippon Yusen Kalsha, largest of the big shipping 



THE OPEN DOOR IN MANCHURIA 207 

companies, and in the great Mitsui firm, which, in its 
various ramifications, is the greatest commercial power in 
the Empire; and the relations of the Yokohama Specie 
Bank to the currency in Manchuria, which I will hereafter 
discuss, will give an idea of its power under existing condi- 
tions. The purpose of the Government respecting trade 
in Manchuria, as printed in the newspapers, was summed 
in four articles, as follows : 

Article I — The Government to guarantee a loan of 
yen 6,000,000 at 4 per cent., to be advanced to Japanese 
merchants doing business in Manchuria, to assist them in 
establishing a trade for Japanese goods. 

Article 2 — Japanese goods destined for Manchuria 
to be delivered upon credit under certain limitations. 

Article 3 — The Chinese Eastern Railway (South/ 
Manchurian Railway) to carry such goods free, orjitone- 
half the usual rate, for one year. 

Article 4 — Maritime freightage in Japanese ships 
carrying Japanese goods to Manchuria to be, free, or at] 
..one-half the usual rate, for one year. 

There were a number of supplementary provisions re- 
garding details for working out the plan as a whole. 
Firms taking advantage of the Government loan for this 
purpose, and which did a business aggregating a stated 
sum annually, were to have ^ per cent, of the interest 
charge refunded, as encouragement to extra effort. It 
may be admitted, I think, that when a Government lends 
money directly to private persons to engage In private 
business, at a rate of Interest below normal; also guaran- 
tees them credit for a limited amount, and carries their 
merchandise free or at half rate to where It Is to be sold. 
It is giving pretty substantial encouragement; and it Is 



2o8 THE FAR EASTERN QUESTION 

time for competitors to take notice. All that is in- 
volved, in respect to outside competition, does not appear 
on the surface of this plan, unusual and far-reaching as 
it is. To get at its full effects, and the extent of Japan's 
efforts to push her trade in Manchuria, requires analysis 
of all factors to the proposition, in the light of actual 
conditions there during the occupation period. 

Few will deny, as an abstract proposition, that a gov- 
ernment legitimately may undertake to advance its na- 
tional commerce by such methods as are here outlined; 
for although merchants may be allowed a rate of interest 
below the market, the difference must be paid by some 
one, and to say that goods are carried free does not mean 
that it costs nothing to convey them. In this case it 
merely means that these ordinary expenses attendant upon 
the transaction of business temporarily are shifted from 
certain classes of the community to others; the presump- 
tion here being that the cost of the experiment will bej 
merged into general taxation. Either this must be true, 
or there lurks in the project a design in some way to load| 
the cost upon elements external to the nation. 

The Chinese Eastern Railway, mentioned in Article 3, 
is that part of the South Manchurian Railway ceded by 
Russia to Japan, and extends from a point in central Man- 
churia to Port Arthur, with branches to Dalny and New^ 
chwang. Whether the railway from Antung to Mouk- 
den, which Japan is to continue to operate, is to be in- 
cluded in the arrangement was not stated; but while prob- 
ability now indicates that this road will when rebuilt 
be conducted under a different name, there is no reason 
to doubt that it, as well as railways in Japan and Korea, 
also will be utilized wherever it is possible. Thus all of 
several routes of transportation between Japan and Man- 
churia, and penetrating into this country, are controlled 



..--t 



THE OPEN DOOR IN MANCHURIA 209 

over their entire length by the Japanese Government. By 
these lines goods from Japan can reach the interior of 
Manchuria over four different routes: By ship to New- 
chwang, and thence by rail to interior points on either 
of two railways; by ship to Port Arthur or Dalny, and 
thence by rail ; by ship to Antung, and thence by rail ; and 
by ship to Fusan, and thence by rail to Antung. It is 
probable that the rail route through Korea will rarely be 
used for this purpose, as water transportation usually is 
cheaper. 

Assuming that Japan is permitted to remain, as she now 
actually is, the absolute sovereign of Korea, it will not be 
feasible for foreign powers to object to regulations she 
may make regarding the operation of railways in Korea 
If Japan wishes, in countries under her sovereignty, to 
carry Japanese goods free of charge, and to impose a | 
heavy tariff on foreign goods. In order to encourage home | 
industries, it might be considered unusual ; but it is diffi- 1 
cult to see just how international objection logically can! 
be made, since many governments resort to devices fullyj 
as unfair with the same general object, and the right oi\ 
a nation to regulate its internal affairs is unquestioned^. 
The Japanese Government owns the railways in Japan 
and Korea, and revenues drawn from them are only an 
Item In the national income, to be raised or lowered as the 
Government sees fit. If Japan should adopt the policy 
of operating her railways at a loss, charging the deficit 
upon other revenues. It would be purely her own busi- 
ness. 

As Japan's position In Manchuria Is not, however, 
recognized as sovereign, but Is assumed merely to be 
temporary and preliminary to complete restoration of the 
sovereignty of China, it Is clear that Japan's railway in- 
terests there are on a different basis from those In Japan 



2IO THE FAR EASTERN QUESTION 

and Korea. In Manchuria Japan's governmental func- 
tions, after the period of occupation has ended (if it ever 
ends), do not, or should not apply. Here all nations 
have an interest In the way these railways are managed. ,■ 
All great trading nations have commercial treaties with 
China which entitle them to " most favored nation " 
treatment; which means, reduced to practice, that a nation 
having such a treaty is entitled everywhere in the Chinese 
Empire to any commercial opportunities and advantages 
enjoyed by any other foreign nation, and must not be 
discriminated against in favor of any foreign nation. In 
all treaties granting to foreign governments or corpora- 
tions a right to build and operate railways in China, it 
is understood that railways must give equal facilities to 
all foreign nations. It is true that some railway conven- 
tions exacted from China at a time when she was particu- 
larly helpless and ignorant of such things, are ambiguous 
in this and other important matters, perhaps purposely 
so ; but this tendency long ago was noted by the diplomacy 
of the world, and steps taken, by mutual exchange of 
views, to guarantee international equity in this. Most 
observers of the course of events in China during the last 
decade will recall John Hay's successful effort to secure 
definite assurance from Germany that the Shantung Rail- 
way will not be operated so as to discriminate against 
goods of other nations, and the International understand- 
ing respecting the " open door " that resulted from his \ 
action. 

Did not China and foreign nations trading within her 
borders recognize this principle we might, and probably 
would see a German railway in China favoring German 
products In its tariff rates-; a French railway carrying 
French goods cheaper than British, German and Amer- 
ican; an English railway giving rebates to British ship- 



THE OPEN DOOR IN MANCHURIA 211 

pers while charging a straight rate to their competitors, 
and so on. Suppose in the United States the Pennsyl- 
vania system gave to German goods a lower rate than to 
British, French or Austrian; that the Gould system fa- 
vored the British; that the lines controlled by Mr. Hill 
were owned by the French Government, which permitted 
all goods from France to be carried for less than goods 
originating in England and Germany, or even America. 
Would not such a condition result in commercial chaos, 
to say nothing of possibilities for international fric- 
tion growing out of it? The manner by which rate dis- 
criminations have affected Internal commerce in America 
gives an idea of some effects of this method, and conveys 
an impression of the part it may be made to play in 
furthering international trade rivalries in the Far East. 
John Hay saw what such a situation would mean, and 
tried to nip tendencies toward it in the bud. Nothing, 
then, can be clearer than that Japan's position as a rail-^ 
way operator in Manchuria is as a corporation, not a|; 
Government; and as a corporation she Is amenable, or| 
should be, to the laws and treaties of China. Any otherl 
interpretation of foreign railway franchises here would?! 
he tantamount to destruction of China's power to regu- 
late Internal commerce within her domain. Japan may •/? 
operate railways as a Government In Japan, and also may » 
In Korea if the powers continue to be complaisant, but In 
China she should be required to conduct them as a corpora- 
tion. 

When, therefore, Japan announced an Intention to per- 
mit the transport of Japanese products and goods shipped 
by Japanese merchants for consumption In Manchuria 
over a railway In Manchuria free of charges, while other 
foreign products and traders must pay, It looks like dellb-;_^i 
erately setting at naught the Hay Agreement^ "^ It Is true 



212 THE FAR EASTERN QUESTION 

that, in published accounts of the proposals, these special 
privileges were to extend over a period only of one year. 
The policy was announced in the spring of 1906, and 
probably had in mind the fact that the extreme limit of 
the military occupation of Manchuria expired in the 
spring of 1907,^ or about one year from the time when 
these special privileges were to go into effect. It may be, 
as this seems to indicate, that Japan reahzed that for her 
to continue such a policy after the occupation period had 
expired would be difficult, and likely to cause international 
criticism ; which throws into rather a strong light her 
intention to use temporary control of the country to ad- 
vance her national interests there. 

Since Japanese statesmen and the Japanese press have 
repeatedly denied, in the most specific terms, that the 
Government is disposed to take such advantage at the 
possible expense of other competitive nations, and that 
its actions in Manchuria have had such an effect, It is 
pertinent to examine some phases of Japanese adminis- 
tration there since the termination of hostilities. 

1 Appendix A. 



CHAPTER XVII 

THE OPEN DOOR IN MANCHURIA — Continued 

Japanese Closure of the Country — Injury to Foreign 
Interests — Policy of the Military Administration — 
Passports Refused to Foreigners — Such Restrictions Un- 
necessary — YlsiT of Foreign Merchants — Their Report 
AND Recommendations — Evasion of Chinese Customs — 
Pretense of Military Necessity — Pjelqtests. of Chambers 

.OE-COMMERqE JAPANESE REFUSAL TO PaY LiKIN CHIN- 
ESE Officials Ignored — Usurpation of Chinese Private 
Property • — Character of Japanese Immigrants — A For- 
eign Missionary's Views — Japanese in Non-treaty Towns 
— The Principle Involved. 

The success of Japanese during the war In keeping 
events In Manchuria, except such as they chose to make 
public, from general knowledge of the world has been 
so widely commented upon that It only needs to be 
referred to for most persons to recall It. Notwithstand- 
ing expectation to the contrary, this policy was continued 
after the treaty of peace had been ratified and dis- 
persal of the opposing armies had begun. As months 
passed it became evident that Manchuria was as closely 
locked, especially In the part occupied by Japan, as It was 
during the war. The chief commercial Ingress to Man- 
churia always has been from the south, so while the same 
conditions prevailed to some extent In the Russian sphere, 
the closing of it was not so generally or immediately felt. 
No sooner was conclusion of peace announced, when 

213 



214 THE FAR EASTERN QUESTION 

Chinese and foreign commercial houses, whose trade in 
Manchuria had been interrupted by the war, and which 
had accumulated large stocks of goods ordinarily con- 
sumed there, made preparations to resume business, nat- 
urally anticipating a great demand. Other foreigners 
who had property and private interests there prepared to 
go to look after them, and discover how they had fared 
during the war. To their surprise, such persons found 
the doors to southern Manchuria shut. Obstacles were 
placed in the way of foreign goods entering the country, 
and no foreigner could travel without a passport granted 
by Japanese military authorities. 

As an inevitable effect of a prolonged war Is to deplete 
the resources of a land which is the scene of it, and ex- 
haust commodities therein, it is usual in such cases to 
facilitate introduction of supplies of all kinds, and to 
deprecate as contrary to humanitarian spirit any disposi- 
tion to prolong the hardships of noncombatants in a war 
zone, and to make of their necessities a speculative oppor- 
tunity. It can hardly be pretended, with any show of 
reason, that military necessity for such restrictions ex- 
isted after hostilities ended. What, then, were the rea- 
sons for continuation of a strict military exclusion ? 

It was not to be expected that trading firms in China, 
which already had suffered considerable detriment by the 
war, would permit an indefinite continuation of the mili- 
tary embargo upon trade in Manchuria without protest. 
Western chancelleries might for a time be satisfied by 
vague talk about a necessary interregnum, but practical 
business men felt that their interests were being injured, 
perhaps permanently. Merchants in Shanghai and Tien- 
tsin had purchased largely of goods usually sold in Man- 
churia, anticipating an end of the war, and when peace 
was declared godowns were filled with this merchandise 



. THE OPEN DOOR IN MANCHURIA 215 

and a number of ships already loaded for the north. The ! 
Japanese closure brought about stagnation, and a conse- 
quent business depression, which was felt over the whole i -(\^ 
of middle and north China, and which is not yet ended. ; 
Some firms were threatened with bankruptcy, and a few ' 
weak concerns did collapse. The situation became so 
serious that the Shanghai Chamber of Commerce, after 
getting no satisfaction from correspondence with the Jap- 
anese military authorities, resolved upon more decisive 
action. Application was made to the Japanese Consul- 
General at Shanghai for permission for a committee rep- 
resenting commercial interests in Shanghai to proceed to 
Manchuria and investigate conditions. This request was 
refused, with the usual excuses and regrets; whereupon 
the matter was taken to Peking and placed in the hands 
of the British and American ministers. This brought 
quick action by Japan, for the cabinet at Tokyo evidently 
did not want the question to be raised diplomatically at 
that time; so the Japanese Consul-General at Shanghai 
promptly changed front, and Informed the merchants 
that permission would be given for a committee to visit 
Manchuria. 

In the spring of 1906 the visit was made. The com- 
mittee, which was composed of two British and two Amer- 
ican merchants, was cordially received at Newchwang by 
the Japanese military authorities, and taken, under their 
supervision, on a short visit to Moukden and some other ^< 
Interior points. I state on excellent authority that every 
endeavor was made, unobtrusively, by Japanese officials to 
prevent members of the committee from meeting persons 
likely to represent conditions unfavorably for the Japa- 
nese administration, and they particularly were kept away 
from prominent Chinese. But the committee was com- 
posed of shrewd business men, who might be trusted to 



2i6 THE FAR EASTERN QUESTION 

notice a good deal, even with limited and adverse op- 
portunity. When the members returned to Shanghai a 
report was' made to the body which they represented, 
portions of which were published. To read the news- 
papers in Japan and China, concerning this report, one 
might gather that it painted Japanese administration 
of Manchuria in glowing colors or that the Japanese ad- 
ministration was ruining the country and was deliberately 
bent upon driving all foreign business out of it. The 
view taken of the report depended upon the interest in 
which each newspaper was retained. News despatches 
sent abroad also reflected such considerations to a great 
extent; so, as Far Eastern press services are almost alto- 
gether handled in the British and Japanese interests, it is 
likely that western readers got the idea that this report 
was rather favorable than otherwise, and that It was a 
matter of minor Importance anyway. 

The truth seems to be somewhere between these ex- 
tremes, although members of the committee were Inclined 
to be reticent upon their return. An impression was dis- 
seminated, in a general way, that the report was confi- 
dential, and that while some grounds for dissatisfaction 
existed, the Japanese authorities had promised a speedy 
modification of offensive conditions. The key-note of 
the greater part of eastern press comment was a glossing 
over of the question, by reminders that conditions in Man- 
churia were only temporary, and that Japan could be re- 
lied upon to modify them as soon as was possible. That 
the report contained elements of great vitality Is shown 
by the fact that It repeatedly came up In one form or an- 
other, notwithstanding strong disposition In powerful quar- 
ters finally to bury It. Several months after It was pre- 
sented, the Shanghai branch of the British China Associa- 
tion forwarded to the British minister at Peking some 




On the South Manchurian Railway. 




Japan's Commercial Invasion of Manchuria. 
Two of these signs, which were erected while other foreigners were 
excluded from the country, advertise Japanese Government monop- 
olistic products. 



THE OPEN DOOR IN MANCHURIA 217 

recommendations based upon it. As these recommenda- 
tions introduced some matters of great importance, I re- 
produce the more pertinent published ones : 

1 — The Diplomatic Corps should take steps to have 
the Chinese customs established at Tairen (Dalny), with 
a view to preventing Japanese commodities from being 
imported to various places in Manchuria without the pay- 
ment of import duties and likin. 

2 — That necessary steps be taken to put a stop to the 
illegal trade conducted in Manchuria through the Korean 
frontier. 

3 — That the Chinese Government be advised to take 
steps to remove the obstacles placed on the junk trade on 
the Liao river, on account of the railway bridge thrown 
across the river by the Japanese authorities. 

This leads to examination of conditions under which 
foreign commodities are presumed to enter Manchuria. 
Being a part of China, the Chinese customs treaty ap- 
plies. Prior to the late war there was but one maritime 
custom house in Manchuria, Newchwang then being the 
only treaty port which actually had been opened. So 
dutiable goods entering the country, except those com- 
ing through the Siberian land frontier and those introduced 
by smugglers, passed through the custom house at New- 
chwang. When a concession was granted for Russia to 
build a railway through Manchuria, it was provided 
that custom houses should be established upon the Rus- 
sian frontier; but in the disorderly times that fol- 
lowed nothing was done toward carrying out this provi- 
sion, and it then remained to be adjusted. However, 
under conditions as they formerly existed, it was a matter 
of small practical importance, as trade across the Sibe- 



■A 



218 THE FAR EASTERN QUESTION 

rian frontier was not of a character seriously to compete 
with foreign trade entering the country from the south. 
So, although the question periodically cropped up, there 
was no strong pressure from any source to compel action. 
With the advent of the Japanese the situation, in re- 
spect to southern Manchuria, entirely changed. All of 
Korea and some parts of Manchuria have been occupied 
by them for four years now, which is long enough to 
permit some reasonable conclusions to be drawn about 
Japan's commercial policy. Basing my opinion on a 
study of conditions, and as diligent inquiry as I was able 
to make, I am convinced that almost from the moment a 
locality was occupied by Japanese armies It was the de- 
liberate and calculated effort of Japan to use her posses- 
sion of these territories to establish and advance her 
commercial interests. In order to do this she excluded 
/ as far as was possible all competitors both actual and 
I prospective, while at the same time throwing open the 
I country to her own nationals. She impeded by innumer- 
able petty devices, usually cloaked by a pretense of mil- 
itary necessity, the Ingress and transport In Manchu- 
ria of foreign commodities which have long had a large 
sale there, and which were required for uses of the Chi- 
nese population; and while such foreign commodities as 
were permitted to enter passed through the Chinese cus- 
itom house, similar commodities from Japan were per- 
mitted to enter duty free through Dalny and Antung. 

As Japanese authorities In Manchuria and the Govern- 
ment at Tokyo deny that Japanese merchandise was 
brought Into Manchuria free of tariff, it is, of course, not 
possible to obtain exact Information of the extent of this 
evasion; but It positively Is known to be considerable. 
When protests were made by foreigners who felt that 
this kind of competition is illegal and unfair, the Japa- 



THE OPEN DOOR IN MANCHURIA 219 

nese authorities at first replied that importation of 
supplies through Port Arthur, Dalny and Antung was 
solely for military uses, and that they were not of a com^ 
mercial character; then, when withdrawal of the greateij 
part of the army has invalidated this excuse, the usual 
reply is a general denial. Early in 1906 the Foreign 
Chamber of Commerce of Newchwang addressed the 
foreign consular body there, protesting against a num- 
ber of handicaps upon internal trade In Manchuria alleged 
to have been imposed by the Japanese authorities; and/ 
also protested against the importation of Japanese goods 
duty free through Dalny and Korea. It Is hardly to be 
presumed that these foreign business houses, which gen- 
erally had been sympathetic to Japan, and with long-es- 
tablished trade In the country and excellent sources of 
Information, were making an outcry about nothing. 

Restrictions upon Internal trade complained of by other 
foreign merchants, and also by Chinese officials, usually 
arise out of Irregularities In connection with or evasion, 
of the likin. From the time they occupied the country 
the Japanese paid no attention, either officially or pri- 
vately, to local tax regulations. It Is Interesting to 
examine some effects of this disposition, particularly upon 
Chinese commercial classes. The likin, which Is uni- 
versal throughout China, Is analogous to municipal, 
county and township taxes In America, or octroi in some 
European countries. In that It Is for the purpose of rais- 
ing local revenues apart from those Imposed by national 
and provincial administrations, although some part of it 
usually finds Its way to higher quarters. The system 
Is complex, wasteful and full of abuses; but fuller dis- 
cussion of It Is not needed In this connection. Some of 
its methods, especially In larger municipalities, corre- 
spond to the licensing system so generally employed In 



220 THE FAR EASTERN QUESTION 

Europe and America. Japanese traders who swarmed 
into Manchuria in the trail of the armies, and who have 
been greatly augmented since the war ended, consistently 
refused to pay likin from the beginning. At first, or 
as soon as something like order was restored after a local- 
ity had been swept by the battle zone, local Chinese offi- 
cials made attempts to collect taxes from Japanese trad- 
ers, and upon refusal made representations to the military 
authorities; who invariably either ignored the matter or 
sustained their own nationals. So the condition became 
established, and Chinese officials have since then usually 
contented themselves by making an occasional demand 
for form's sake. 

But the Chinese trader still has to pay his taxes, which 
puts him at a disadvantage with his Japanese competitor. 
In every town and city in southern Manchuria can be seen 
Japanese shops doing business alongside Chinese stores, 
and selling practically the same commodities. To the 
extent that these articles are of foreign origin, the Jap- 
anese trader often has the advantage of offering a simi- 
lar article made in Japan, and which has been imported 
free of duty, and, perhaps also free of transport charges ; 
and he is free from local taxation, which in this, as in most 
countries, is an appreciable burden upon commerce. It is 
no wonder that Chinese regard this new competitor with 
concern, which is not lessened by the fact that in some 
cases Japanese also are living rent free through having 
usurped the premises of Chinese. I know a case in 
Moukden where part of the house of a Chinese merchant 
was occupied by Japanese traders selling similar com- 
modities under the following circumstances : Just prior 
to the battle of Moukden the owner, desiring to get his 
family to a place of safety, took it to Tsinmintun and 
down into China proper, outside the area of hostilities. 



THE OPEN DOOR IN MANCHURIA 221 

When he returned the city was taken by the Japanese 
army, and he found a portion of his property occupied 
by Japanese traders. He tried to get them to vacate, 
but failed, and his protests to the Japanese authorities 
were unavaihng. So he effected a compromise with the 
Japanese traders by permitting them to remain in a part 
of his building fronting on the street, where they still 
were when I was last in Moukden. I could give many 
such instances, and worse, for in this case the Chinese 
managed to regain possession of most of his premises, 
while in many similar situations Chinese owners have lost 
their property altogether, and sometimes lost their lives 
trying to recover it. 

The Japanese immigration which poured into Man- 
churia during and immediately after the war also de- 
serves some notice, on account of its political and social 
phases. It was not, until quite recently, possible to ob- 
tain accurate figures bearing upon the extent of this im- 
migration of the civilian class, but fairly rehable esti- 
mates made in 1906 placed it from 40,000 to 60,000 in 
the region under Japan's administration. The greater 
number of these immigrants settled in larger cities 
along the railway lines, but thousands penetrated the in- 
terior and became domiciled in remoter towns and vil- 
lages. These male settlers almost entirely are shopkeep- 
ers and artisans in so far as they have regular occupations; 
but a large proportion simply are adventurers, ne'er-do- 
wells at home, who came in the hope of quickly making 
a fortune in Manchuria, which has been represented in 
Japan as a country of marvelous wealth. In discussing 
some moral aspects of Japanese occupation with an 
English missionary of world-wide reputation, who has re- 
sided in Manchuria for many years and was there through 
the entire period embracing the Russian occupation and 



222 THE FAR EASTERN QUESTION 

the war, I found him in a rather gloomy frame of mind. 
Among other things, he said: 

" I am very much disappointed at some results of Japa- 
nese administration. Its general effect has been decid- 
edly to lower the moral standards of Chinese life. The 
conditions under which the people have been compelled to 
exist, the necessity for constant evasion and lying to 
save their lives and property, the deteriorating commer- 
cial influence of Japanese traders who are supported 
in their pretensions by the military authorities, the uncer- 
tainty of obtaining justice from Japanese military courts, 
and the presence of thousands of Japanese men of low 
character and immoral Japanese women, who openly ply 
their avocation in the streets of the cities and towns, are 
corrupting influences new to the country, or only felt be- 
fore in a limited degree." 

Since the moral betterments presumed to follow an ex- 
tension of Japanese influence and authority in Asia have 
been kept prominently to the fore in western discussion 
of probabilities, this opinion of an unprejudiced observer 
has considerable interest and significance. Delicate as 
this subject of Japanese women in Manchuria is, it is 
hard to omit it from any comprehensive and candid discus- 
sion of conditions. It confronts one at every turn, about 
the railway stations and in the streets. Next to the 
soldiery and the commercial advertisements with which 
they have plastered the country, it is the most obvious 
indication of Japanese occupation. Its extent may be ap- 
preciated when I say that, from the best information I 
could obtain, coupled with my own observation, probably 
one-fourth of the civilian Japanese population in Man- 
churia belongs to this class. That this assertion may not 
lack support, I quote from a leading foreign newspaper 



THE OPEN DOOR IN MANCHURIA 223 

in Japan, whose proprietor is married to a Japanese lady 
and has long lived happily with her: 

" We have at all times considered it our duty to defend 
Japanese women against the charges of immorality em- 
anating from globe-trotters and others who have sought 
immorality in Japan and who, of course, found it. 
The depths to which women can and do sink 
in the West . . . are, fortunately, still unknown in 
Japan. 

" But in spite of this we are not ourselves blind to 
the fact that .the whole Far East swarms with Japanese 
prostitutes, so that the following paragraph from the 
China Gazette is only one of many of a similar character 
that have appeared in the press of the Far East: 

" ' There are over five thousand immoral Japanese 
women in and around Newchwang, mostly living among 
the Chinese and the Japanese soldiery. Other parts of 
Manchuria are similarly and systematically worked by 
thousands of these enterprising bearers of the glorious 
banner of Dai Nippon in darkest but formerly moral 
Manchuria. The people of the country must be sorely 
puzzled to know what to make of this development of 
western civilization and enlightenment as taught by Ja- 
pan.' 

" This is a disgraceful condition of affairs for which 
the Japanese Government must accept the blame. We 
hear so much about ' bushido ' (whatever it may be), 
Japanese loyalty, chivalry, Japanese sensitiveness to crit- 
icism, etc.; but here we have, at least with the tacit con- 
sent, if not with the actual connivance of the Japanese 
Government, whole provinces of a neighboring continent 
that have passed under Japanese control overrun by thou- 
sands of immoral Japanese women, who are inveigled, 



2 24 THE FAR EASTERN QUESTION 

forced or sold into infamous slavery by Japanese men 
. ; for it is safe to say that not one Japanese woman 
out of a thousand would of her own account go to a for- 
eign country . . ., and that not one of a thousand 
has the means to enter upon such a course of adventure. 
Nor would the dealers who carry on and control the trade 
in Japanese girls permit one to do so. Has the Japanese 
press nothing to say on the subject? " 

It should be stated that the China Gazette, a quota- 
tion from which is included in this criticism,, is sympa- 
thetic to Russia, and quick to seize an opportunity to hurl 
a stone at Japan; and I think the number of women it 
mentions is greatly exaggerated, so far as applies to the 
stated locality. That the general condition so severely 
arraigned by the writer exists there can be no doubt; and 
when circumstances which have attended immigration into 
Manchuria during and since the war are considered, it is 
difficult for the Japanese Government to acquit Itself of 
complicity in this matter. It is idle to say that it could 
not have prevented such immigration. 

While China, in fencing for diplomatic points, lays 
some stress upon this special condition, I think Chinese 
statesmen are more concerned about certain political as- 
pects of the Japanese immigration. The last agreement 
with Japan provides for opening a number of new 
ports where foreigners may reside, and it is fair to pre- 
sume that a majority of Japanese immigrants will settle 
in these places by choice. Many, however, already are 
established in other localities, where they show a dispo- 
sition to remain. China has Insisted that, after the pe- 
riod of Japanese occupation expires, Japanese shall only be 
permitted to reside at treaty ports, as Is the case with 
foreigners elsewhere In China; or If they do reside out- 



THE OPEN DOOR IN MANCHURIA 225 

side such ports extra-territorial jurisdiction over them 
by Japan shall not locally apply. Japan seems to be re- 
luctant to concede this, and apparently desires to retain 
jurisdiction over all her nationals who may choose to live 
in Manchuria. Here is a matter that touches China's 
vitals, not only In Manchuria, but In the whole Empire. 

This propensity of Japanese Immigrants Is worrying 
Chinese in connection with the opening of new treaty 
ports. There is delay In locating the foreign settlements, 
for which China chiefly has been blamed. It appears, 
however, that this Is partly due to indisposition of Jap- 
anese to segregate themselves within specified limits, 
they preferring to remain where they first located, scat- 
tered here and there. No exact division of jurisdiction 
Is possible without geographical limitation, and China 
fears that such a status will result In extension of foreign 
jurisprudence over the entire country, creating endless op- 
portunity for interference in local affairs. So China Is 
disinclined to proceed with the opening of new foreign 
settlements until occupation has entirely ended, and has 
advanced various and usually Immaterial excuses for de- 
lay. Here, again, It should be kept in mind that any ad- 
justment must. In reason, apply also to territory now under 
Russian control. 



CHAPTER XVIII 

THE OPEN DOOR IN MANCHURIA — Continued 

Commercial Effects of Japanese Administration Upon 
THE Chinese — Governmental Aid to Japanese Immi- | 
GRANTS — Petty Japanese Traders — Their Real Func- 1 
TioN — Auxiliaries of the Great Japanese Firms — The 
Mitsui Bussan Kaisha — Effects of Japanese Evasion of J 
the Likin — Chinese Collectors Ejected — Cornering 1 
the Bean Cake — Qiscriminiahon Against. __EoRmGN ''^^— 
Firms — Some Pertinent Examples — Experiences of an 
American Firm — Japanese Counterfeits and Imitations 
— Japanese Manipulation of the Currency — The Yoko- 
hama Specie Bank — Japan's Use of Dalny. 

To many readers of these comments the effects of 
Japanese evasions of internal commercial regulations upon 
other foreign interests in the country will, perhaps, out- 
weigh their effects upon Chinese. While many Japan- 
ese traders came to Manchuria on their own Initiative 
and operate independently, a majority of those now there 
really are agents of large Japanese commercial firms, 
which are backed by the Government. As a rule, these 
small traders have not the means to emigrate, or to 
purchase and Import stocks of merchandise. As I have 
shown, the Government often has provided them with 
means for getting to Manchuria, and with some capital 
and credit. But while this assistance of the Government 
is given the outward form of an endeavor to help Jap- 
anese of all classes to make a beginning In a new coun- 

226 I 



. THE OPEN DOOR IN MANCHURIA 227 

try, It really Is, when analyzed, a scheme to aid big Japan- 
ese corporations associated with the Government to ex- 
ploit Manchuria. In conditions surrounding the exten- 
sion of assistance by the Government, some minor regu- 
lations clearly Indicate this fundamental Intent; such as 
limitation of Interest rebate to firms doing a minimum 
business of Yen 5,000,000 a year. Since none but great 
firms can hope to do as large a business, It is evident that the 
small merchant will not get the benefit of this provision. 
The Mitsui Bussan Kalsha, entrusted by the Government 
and guilds with supervision of the national exploitation 
scheme In Manchuria, had established itself there before 
the war; and almost immediately after the armJes dis- 
lodged the Russians, it took steps to extend its relations. 
This company now covers southern Manchuria with a 
web of branch houses and minor agents, which work hand 
in glove with the Japanese authorities, and are abetted 
and supported by them on every possible occasion, and 
in every practical way. It is impossible, in any intelli- 
gent estimation of commercial forces at work there, to ig- 
nore or minimize the relation between the Japanese Gov- 
ernment and leading Japanese financial, industrial and 
commercial enterprises ; which frequently are so close as al- 
most to make them identical. 

I gathered during my visit in 1906 so many pointed in- 
cidents bearing upon Internal trade conditions in southern 
Manchuria during the Japanese military regime that It Is 
not feasible specifically to refer to all of them; but a few 
may serve to Illustrate some elements of the situation. 
There is a likin upon foreign commodities traversing the 
interior, and there are stations where likin is collected, as 
elsewhere in China. During Japanese occupation this 
likin has been enforced as usual upon foreign goods, 
except Japanese articles, which are exempted by reason 



228 THE FAR EASTERN QUESTION 

of the same general policy that exempts Japanese subjects 
from ordinary processes of Chinese law. Until quite re- 
cently, since it was announced to the world that Chinese 
local autonomy is restored, and an attempt made to give 
some outward evidences of this change, Japanese commer- 
cial houses operating in Manchuria were open and bold 
in defying Chinese regulations. On some commodities 
produced in Manchuria there is an export likin, as bean 
cake and bean products. Japan is the largest consumer 
of these products, as it happens, and exportation of bean 
cake to Japan has in the past been handled by foreign and 
Chinese merchant and shipping firms. Chief among Jap- 
anese competitors for this business, in the mercantile and 
transportation fields, are the Mitsui Bussan Kaisha and two 
of the great Japanese shipping companies. During the 
war, owing to extraordinary conditions, there was dlfl^- 
culty about marketing bean products, and so when peace 
came practically two crops had accumulated and were 
awaiting shipment. The movement of these bean prod- 
ucts has always been to the south, down the Llao river, 
or by cart In winter. Soon after the Japanese occupa- 
tion of Moukden and Tiding, which is a center for the 
bean trade, the Mitsui Bussan Kaisha sent agents through 
the country to buy bean cake, which was brought to 
Newchwang and shipped to Japan, it Is alleged, without 
likin being paid. As this method gave the Mitsui com- 
pany an advantage over other exporting firms which had 
to pay the tax. It quickly attracted attention, and a de- 
mand was made upon Chinese officials that the likin on 
bean products be rescinded until normal conditions are 
restored, so as to place Chinese and other foreign ex- 
porters on equality with Japanese. When the Japanese 
authorities learned of this demand, they refused to per- 
mit any modification of the regulations, and denied that 



THE OPEN DOOR IN MANCHURIA 229 

Japanese exporters were not paying likin. There seems 
to be little reason to doubt, however, that a large quan- 
tity of bean cake purchased by the Mitsui Company 
was moved without paying this tax, although after the 
complaint of the other exporters and shippers the viola- 
tion of Chinese regulations was not so open. 

While I was in Moukden in 1906, Chinese officials, 
in order, perhaps, to see how far their " restored " au- 
thority really extended, sent a likin collector to a Japa- 
nese store to demand payment of the tax upon certain 
foreign commodities in which it did a large business. 
This store, although ostensibly conducted as a private busi- 
ness. Is a branch of the Mitsui Bussan Kaisha ; and the col- 
lector was promptly ejected from the place. A complaint 
to the Japanese authorities had no practical result. Thus, 
while southern Manchuria was overrun by small Japa- 
nese traders and agents, foreign firms were kept out of the^ 
country, and were not permitted to establish agencies un- 
til more than a year after the war had ended. The rail- 
way stations swarmed with hawkers offering Japanese 
products, but hawkers of foreign commodities, especially 
those competing with any of the Japanese Government 
monopolies or articles for which the great Japanese com- 
mercial houses are agents, were not permitted to do busi- 
ness. Since August i, 1906, when the ban upon foreign- 
ers entering the country was removed, and responsible for- 
eign agents could establish themselves and closely watch 
conditions, protests to the Japanese authorities have led 
to modification of many of these petty impediments; for 
complaint by a foreigner, on the ground and fully in 
possession of the facts, is a different matter from one by 
a Chinese, and the military authorities were compelled to 
notice them. 

The persistence and unanimity with which the military 



230 THE FAR EASTERN QUESTION 

authorities have protected Japanese traders and supported 
them in thefr evasions and conflicts with local Chinese reg- 
ulations is understandable only when it is realized that the 
little trader is part of a system having behind it the Jap- 
anese Government, and the greater industrial and com- 
mercial interests of the Empire. In selecting a few more 
examples of objectionable methods employed to advance 
Japanese trade in Manchuria I will confine them to matters 
directly involving' the Government, so there can be no 
question as to responsibility for the relation between cer- 
tain causes and effects. Early in 1906, finding some en- 
couragement in growing manifestations among foreigners 
of discontent with Japanese administration, the Chinese 
Government, through its officials, began a series of moves 
to regain its autonomy, particularly in respect to collection 
of revenues. This movement assumed various forms, 
but one significant tendency was to increase likin upon 
foreign commodities sold in the country. The question 
of likin on foreign goods In China has long been an inter- 
national sore-spot, and many unsuccessful efforts have 
been made to have it removed; but as long as the condi- 
tion exists the action of Chinese officials in Manchuria in 
trying to produce more revenue by this means must be rec- 
ognized as legitimate, and foreign firms doing business 
there did not at first protest. It soon developed that the 
new likin was having results Invidiously detrimental to 
some foreign Interests in contradistinction to others. 

In May, 1906, the Chinese began to levy an Increased 
likin upon tobacco products sold In Manchuria. The tax 
was raised from two to five per cent, ad valorem, or more 
than doubled. The tobacco business In Manchuria was, 
before the war, largely controlled by the British-Ameri- 
can Tobacco Company. As a war revenue measure, and 
what has proved to be the forerunner of a national In- 



THE OPEN DOOR IN MANCHURIA 231 

dustrial ownership policy, the Japanese Government com- 
pelled the British-American Company to sell to the Gov- 
ernment its factories in Japan, which then supplied a 
considerable part of the Far Eastern demand. Thus de- 
prived of a large output, the British-American Company 
began erection of factories in China, and Is now again 
ready to meet the requirements of its trade In eastern , 
Asia. But It has a competitor In the Japanese Govern- ' 
ment Tobacco Monopoly, which Is making an energetic 
campaign In China, and particularly In Manchuria. Dur- 
ing the year which followed the making of peace, the 
British-American Company made efforts to resuscitate its 1 >^p 
business there, but found that It encountered obstacles 
on every hand. Except a foreign superintendent In New- 
chwang, the trade always had been supplied through Chi- 
nese agents distributed over the country, who put prod- 
ucts In the hands of retail merchants. In China to- 
bacco products consumed by the lower classes, which con- 
stitutes a great proportion of the business, usually are 
sold by peddlers, or hawkers, who are to be seen every- 
where. All persons who have visited China must have 
noticed how Important this peddling system Is in the In- 
ternal commerce of the Empire, and how closely It touches 
the life of the people. The coolie buys his food from a 
peddler, his occasional beverage from another, his bit of 
sweetmeat from another, his cigarettes from still another, 
all in the course of a single day, and when the money and 
desire happen to be possessed at the same time. Hawk- 
ers are supplied by retail merchants, who Issue goods 
to them in small quantities from day to day. 

Japanese military administration of southern Manchu- 
ria had not continued for long when complaints began 
to reach managers of the British-American Tobacco 
Company In Shanghai that their Chinese agents In Man- 



232 THE FAR EASTERN QUESTION 

churia were having trouble. Hawkers of their products 
were not permitted about railway stations or other places 
occupied and directly controlled by Japanese, and many 
hawkers were maltreated and threatened by Japanese 
roughs. It became evident that a campaign of intimida- 
tion against native vendors of British-American brands 
was systematically being carried out; and it even was ex- 
tended to the shopkeepers. Meanwhile products of 
the Japanese Government Tobacco Monopoly were being 
energetically pushed, usually by Japanese traders, but in 
many cases by Chinese merchants who were induced to ac- 
cept agencies. Native agents of the British-American 
Company quickly felt the effects of this movement, and 
soon found themselves seriously handicapped. When rep- 
resentations were made to the Japanese authorities, they 
denied that such conditions existed, and at first refused to 
allow a foreign representative of the British-American 
firm to travel in the country to investigate and look after 
its interests. 

It will be noted that this case is peculiarly significant in 
several ways. The foreign business firm affected is joint- 
ly composed of persons of the two nationalities which 
might above all others be presumed to receive favorable 
treatment from Japanese if such treatment was accorded 
to any, and is in a position to exert a powerful influ- 
ence in Its behalf; and the competitive concern is not only 
of Japanese nationality, but is the Japanese Government. 
Finally, after a lapse of months during which these meth- 
ods steadily were employed, permission was granted to a 
foreign agent of the British-American Company to travel 
in Manchuria ; who made a report to his organization fully 
confirming the charges of unfair discrimination. This 
agent was born In Newchwang, speaks Chinese fluently, 
and probably no living white man Is In closer touch with 








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Map of Railway Development in the Chinese Empire and contiguous Territories. Illustrating the International Political Strategy Involved. 



THE OPEN DOOR IN MANCHURIA 233 

Chinese In Manchuria, or has greater familiarity with con- 
ditions In the country, and he moreover Is a man of 
good social and business standing In the foreign commu- 
nity of north China. 

Upon representations privately made by British diplo- 
mats in Peking and Tokyo, some of the more open and 
offensive methods were abandoned, and under energetic 
treatment the business of the British-American Company 
began to revive with extraordinary rapidity, conclusively 
showing that no disinclination to use its products, or to 
prefer those offered by its competitor, had been the cause 
of previous falling off in business. The company was 
congratulating itself that the worst was over, and that in 
the future it would have a fair chance, when the increase 
of likin upon tobacco was ordered. During this time the 
products of the British-American Company had been com- 
pelled to pay the usual likin, while the Japanese article 
had not. The increase in the tax was first put into effect 
in May, 1906, at Tiding, an important city near the 
northern boundary of the Japanese sphere. Chinese 
agents of the British-American Company soon informed 
Its superintendent in Newchwang that Chinese offi- 
cials were collecting the increased tax from them, but 
were collecting nothing from agents of the Japanese Gov- 
ernment Tobacco Monopoly. As soon as he could get a 
passport from the military authorities, which took some 
time, the superintendent went to Tieling to investigate 
the situation. He at once instructed his agents to refuse 
to pay the extra tax, and any likin at all unless it also was 
collected from Japanese dealers; whereupon a feeble at- 
tempt was made to collect from a principal Japanese 
agent, who summoned Japanese soldiers and had the col- 
lector ejected. The superintendent of the British-Amer- 
ican Company then formally notified the Taotai that he 



234 THE FAR EASTERN QUESTION 

had instructed its agents not to pay the tax until it was 
also collected from Japanese, and if they were further mo- 
lested the matter would be taken up at Peking. The 
Taotai was in a quandary, and told the superintendent 
that collection of the tax would be suspended pending 
adjustment of the matter. Later the Taotai sent word 
to the superintendent that he had put the tax into effect un- 
der orders from the Japanese mihtary authorities, who 
bullied him upon every possible occasion. When he re- 
turned to Newchwang the superintendent made an em- 
phatic protest to the superior Japanese authorities, who 
assured him that it was an error to presume that the Jap- 
anese Tobacco Monopoly does not pay likin, as it was 
paid under a private arrangement between the two gov- 
ernments, in adjusting the many matters at issue concern- 
ing their relations. There the matter stood for several 
months, at a sort of dead-lock, neither side paying the 
tax, which was for the time nullified, with China quite 
helpless to enforce payment. 

Another phase of commercial competition which Jap- 
anese have introduced into Manchuria, is imitation and 
counterfeit of other foreign-made articles. These imita- 
tions are numerous, but I will here revive this matter only 
to mention a case directly involving the Japanese Govern- 
ment, and which follows naturally upon questions I have 
just discussed. In 1906 I purchased in a street in 
Moukden, from two Chinese hawkers near together, two 
packages of cigarettes. One is a " chop " manufactured by 
the British-American Tobacco Company, and the other 
states on its face that it is a product of a factory of the 
Japanese Government Tobacco Monopoly. The British- 
American brand is one that has been sold in China for 
years, and was formerly made in the Japan factories of the 
company. It has an enormous sale In the Far East, and is 



. THE OPEN DOOR IN MANCHURIA 235 

probably the best advertised cigarette in eastern Asia. 
The other package is a brand that made its appearance in 
the market since the Japanese occupation of Manchuria. 
This alleged Japanese " chop " belongs in the category of 
imitations, rather than counterfeits ; for the imitation is not 
in all points exact, for enough minor differences have been 
inserted to give a little foundation for the contention that 
the similarity was unintentional. Difference in the ex- 
terior of these packages are so slight that they seem iden- 
tical to casual inspection, even to one who reads English, 
while to a Chinese coolie who may buy them, and who 
judges only by appearance, since he cannot read, the di- 
vergences are too slight to be obvious. The coolies, who 
are somewhat wary, have a habit of counting the letters 
in a printed line for comparison, but they usually depend 
upon the picture, which in this instance was almost iden- 
tical. On the reverse side of the British-American pack- 
age appears the words " prize medals " under a row of 
medals. On the reverse side of the Japanese package 
appears, also under a row of medals, this legend: " ptrade 
marks." By counting the letters in each line they will 
be found to number eleven. This can hardly be taken 
for an accidental coincidence, as the pre-fixing of the 
letter P to the words " trade marks " is not an ordi- 
nary typographical error. There is not the same similar- 
ity in the contents of the packages. The British-Ameri- 
can "chop" is a fair quality of cheap cigarettes; while 
the other package contains cigarettes of the meanest qual- 
ity put upon even this cheap market. Thus it is evident 
that the purpose of this imitation Is not so much to com- 
pete with the well-known brand of the British-American 
Company, as to ruin its reputation with consumers, which 
certainly will be the tendency of its introduction. Cir- 
cumstances surrounding the manufacture of cigarettes 



236 THE FAR EASTERN QUESTION 

in Japan, and attending the introduction of foreign prod- 
ucts into Manchuria, are such that it is hard to beheve 
that the Japanese Government is not party to this impo- 
sition. Under present conditions these are matters to be 
taken up by the British-American Company with the Chi- 
nese, not the Japanese Government; and as the Chinese 
Government can deny, with probable truth, any responsi- 
bility for the condition, it is not easy to secure equitable 
adjustment. 

These imitation packages were on sale in southern 
Manchuria for over a year, and Chinese agents and deal- 
ers of the British-American Tobacco Company informed 
their superintendent that hawkers employed by the Jap- 
anese Government Monopoly, and provided with the 
imitation packages, were instructed to establish them- 
selves alongside hawkers of British-American products, so 
that casual customers for this " chop " might have equal 
opportunity to procure the imitation. After I had no- 
ticed this matter, I took pains to observe the trays of cig- 
arette hawkers who are employed by the Japanese monop- 
oly, particularly those about the railway, and almost all 
of them exhibited this imitation article, and seemed to be 
pushing it particularly. Although I procured counter- 
feits and imitations of many other staple American, and of 
some German and British commodities, which were being 
pushed into the market in Manchuria, I have sufficiently 
illustrated the point involved, and will pass to other phases. 

A factor of great importance in the commercial life of 
any country is its currency; and in Manchuria under the 
Japanese regime it has played a significant part. I have 
called attention in a previous work ^ to impositions upon 
Chinese inhabitants which accompanied the introduction of 
the Japanese " war note " and the enforced retirement of 
1 The New Far East. 



THE OPEN DOOR IN MANCHURIA 237 

the rouble. Irritating to the Chinese as that incident 
was, it had only transitory effect, and has been relegated 
to the profit and loss account of Japanese administration. 
As the passage of war conditions permitted revival of 
trade, and produced a tendency to revert to normal meth- 
ods of transacting business, Japanese control of local 
currency became more important, until it assumed prom- 
inence among elements which operated to Japan's advan- 
tage in her commercial exploitation of the country. It 
was influential in causing a crisis among Chinese bank- 
ers in 1906, and is alleged to have caused the failure 
of several Chinese mercantile firms. Stagnation in for- 
eign commodities which have had a large sale in Man- 
churia for many years, particularly some American prod- 
ucts, led to inquiries, as I have already recited, and 
special investigations with a view to finding where the 
trouble lay. Among these investigators was the agent 
for a large English and American firm, who reported up- 
on certain conditions. It may be stated that the writer of 
this report was for years employed in a foreign bank do- 
ing a large business in Manchuria, and is regarded as the 
leading foreign expert on the money system of this part 
of the Empire. I here give some extracts from his re- 
port, which was made in 1906, withholding the name of 
the writer because his communication to his firm was con- 
fidential. 

" The chief cause for this stagnation Is the lack of a 
stable currency throughout Manchuria, Issued and under 
the control of a government bank which has no other ob- 
ject In view than the general bettering of trade conditions. 
The ' war note ' which was forced into circulation by the 
Japanese Government during the war takes a prominent 
place among the various current effectives now In vogue. 



238 THE FAR EASTERN QUESTION 

The regulating of exchange between the ' war notes ' and 
other current effectives in Manchuria is practically in the 
hands of the Yokohama Specie Bank, unless the ' war 
notes ' are shipped to Japan ; and as there is no other 
competition in this line of business, the rates quoted by 
the Yokohama Specie Bank practically govern the ' war 
note ' exchange market. It is stated that there have 
been fifty millions of ' war notes ' put into circulation. 
Assuming these figures to be authentic, we see that the 
Japanese Government has the power to control the fi- 
nancing of a business amounting to fifty million yen, or 
whatever the circulation of the ' war note ' may be. For 
the past few months the Japanese Government has been 
calling in the ' war notes ' through the Yokohama Spe- 
cie Bank. In their place the Yokohama Specie Bank 
is issuing its own dollar notes, payable in local currency. 
These notes are valued at par with the ' war notes,' but 
the Yokohama Specie Bank redeems them not in ' war 
notes,' but in other current effectives on the basis of 
the ' war note ' rate of exchange. Presumably then, the 
'war note' is considered by the bank as local currency; 
but it will be interesting to see what the Japanese authori- 
ties will consider to be local currency, on which to base the 
value of the Yokohama Specie Bank notes when the ' war 
notes 'are withdrawn from circulation. 

" Judging from this it seems that the ' war note ' In 
Manchuria will be replaced by a dollar note currency, to 
all intents and purposes the same as the ' war note,' with 
the difference that instead of being Issued by the Jap- 
anese Government it will be issued by the Yokohama Spe- 
cie Bank, payable in local currency which has not yet been 
defined, with one banking institution to decide the rate of 
exchange between It and other current effectives." 



THE OPEN DOOR IN MANCHURIA 239 

I find in this report some comment which throws addi- 
tional light upon the question of alleged Japanese evasion 
of Chinese customs and taxes. 

" While on a visit to Port Arthur and Dalny I made a 
thorough investigation of this matter, and satisfied my- 
self on the point that no duty is being charged on Japan- 
ese goods imported from Japan, while the so-called coast 
trade duty is being charged on all other goods imported 
into Dalny, irrespective of whether these goods are of 
foreign or native (Chinese) manufacture. This duty at 
Dalny on a certain class of goods, compared with the 
regulation coast trade duty charged at Newchwang, is 
about twenty times as much." 

To one unacquainted with financial conditions in China, 
the matter of " exchange " there is bafiling and irritat- 
ing, and to master its intricacies is beyond the time and 
patience of ordinary sojourners, even of many resi- 
dents. Yet it is inextricably interwoven with business 
affairs of the country, and its effects cannot be avoided 
even by the casual tourist. Each section of the Em- 
pire has its own currency system, and of these none is 
more complicated than that which has prevailed In Man- 
churia, where, in addition to vagaries of Chinese pro- 
cesses, have been introduced, from time to time, currencies 
injected by pressure of foreign military power. Among 
these extraneous currencies is the Japanese ' war note ' 
referred to in the report quoted, and notes of the Yo- 
kohama Specie Bank which were substituted for them. 
The monetary unit in China is a '' tael," but as there 
is no such thing as a tael or any multiple of it in cir- 
culation, business is transacted in any kind of money or 
bills of exchange, whose value In taels Is computed by 



240 THE FAR EASTERN QUESTION 

the banks. Exchange lists are issued daily by banks in 
the commercial centers, and the business of the day reg- 
ulated by these lists, which frequently slightly vary as 
different banks are " long " or " short " of any particu- 
lar currency, or as the " demand " for certain currencies 
is lively or slack. Frequently exchange will fluctuate con- 
siderably between opening and closing hours of business, 
and traders must constantly be alert to avoid losing in 
their transactions by rise or fall of current effectives. 
The abuses which lurk in the system are obvious enough, 
but are reduced to a minimum when several banks are 
competing for business. These conditions, in a narrower 
and more circumscribed latitude, obtain in financial cen- 
ters of America and Europe, and are familiar, in respect 
to their working principle, to business men everywhere. 

One of the first administrative acts of the Japanese 
Government in Manchuria was to create a condition which 
placed almost entirely in its hands control of the circulat- 
ing medium, through issuance of a currency created 
and regulated by it, and elimination of the restraining 
force of financial competition. The direct means em- 
ployed is the Yokohama Specie Bank, which is fiscal 
agent of the Japanese Government in Manchuria. The 
Russo-Chinese Bank, the only other important bank di- 
rectly operating there before the war, was driven out 
of business in southern Manchuria by the Japanese oc- 
cupation, for a time leaving the field to the Yokohama 
Specie Bank. I think I have made sufliciently clear the 
relations of such institutions to the Japanese Government, 
and their mutual affiliation to advance the national inter- 
ests. Recognizing this, the possible advantages of this 
condition to Japanese trading firms in Manchuria will be 
seen. For instance, if the Mitsui Bussan Kaisha is buy- 
ing or selling a certain article in the market, the transac- 



THE OPEN DOOR IN MANCHURIA 241 

tion equally will affect the person or firm it makes the trade 
with. And if the Mitsui Bussan Kaisha is in a position 
to have special information, or to influence the rates of 
exchange on current effectives, it has an advantage 
over persons or entities it does business with, and also 
over its competitors in the same field. Under conditions 
that prevailed during eighteen months which followed 
the war, and which still exist in a lesser degree, the 
Yokohama Specie Bank, which in this case means the 
Japanese Government, could almost absolutely fix the 
daily rate of exchange. In parts of Manchuria during 
this period the " transfer tael," which Is the basis of or- 
dinary commercial transactions, frequently fluctuated as 
much as twenty per cent, in a week, owing to arbitrary ac- 
tion of the Yokohama Specie Bank in manipulating the 
" demand " for " war notes," then the chief circulating 
medium. It is said that the Mitsui Bussan Kaisha, and 
other large Japanese trading companies, have not once 
been on the wrong side of excEange when It was thus ca- 
vorting up and down ; and this is not less significant because 
its identity In transactions may be, and often Is obscured 
by relays of agents, or middlemen, many of whom are 
Chinese. That siuch a situation gives Japanese com- 
mercial Interests a whip-hand In Manchuria will not, I 
think, be disputed by anyone familiar with business meth- 
ods, and It might be used (and has been there) to drive 
competitors out of business. 

To Illustrate how this matter of money exchange may 
operate In a business transaction In Manchuria under 
these conditions, we may supnose that a Chinese firm con- 
tracts with the Mitsui Bussan Kaisha to take a hundred 
thousand bags of flour, to be delivered on a date fixed, at 
a price In " transfer taels." As the " transfer tael " Is a 
purely fictitious monetary unit. Issued usually as a three 



242 THE FAR EASTERN QUESTION 

months credit, the Chinese merchant probably will sign 
a bill of exchange for the amount, which may be placed 
in a bank and discounted pending its falling due. But 
whether he issues a bill of exchange or not, when the day 
for payment comes he must go into the financial market 
and purchase " transfer taels " to meet his obligation. If 
he finds that " transfer taels " have risen five per cent., 
this means that he has to pay five per cent, more than he 
anticipated. Or to reverse the transaction, suppose the 
Mitsui Bussan Kaisha contracts with a Chinese or foreign 
firm to buy a hundred thousand piculs of bean cake, to be 
delivered on a stated date, at a fixed price in " transfer 
taels." The Chinese house may purchase largely to fill 
the order, figuring on turning the commodity over at a 
small margin of profit. When time for settlement comes 
the "transfer tael" may have dropped ten per cent; 
which means that he will receive ten per cent, less than he 
expected. Nothing in either of these imaginary cases 
would be affected if " war notes " or any other current 
effectives were substituted as the basis of settlement. 
These conditions add greatly to business risks every- 
where in China, but under ordinary circumstances the 
merchant is willing to take his chances on being on the 
right side of exchange when settlement time comes, 
and where there is strong banking competition he will, 
with prudence, come out even on the average. But in 
Manchuria during the Japanese regime, Chinese and for- 
eign merchants claim that they have not a chance to break 
even on exchange, and that it has been habitually manipu- 
lated against them in the interests of Japanese firms; a 
condition for a time made possible by control of the chief 
circulating medium, and by a practical monopoly of large 
banking facilities. This condition affects almost entirely, 
in its direct results, the commercial class ; and independent 



THE OPEN DOOR IN MANCHURIA 243 

Japanese traders sometimes get caught, as they cannot all 
be under cover when a " jump " in exchange takes place. 
In such cases small fry Japanese are left to take their 
chances, but a disposition to protect them whenever possi- 
ble has often been clearly shown. It is openly alleged 
in Newchwang and other cities in Manchuria that small 
Japanese traders are given better rates of exchange by the 
Yokohama Specie Bank than other foreigners or Chinese. 
It could not be expected that such a state of affairs 
would continue for long without some effort being made 
to counteract it, and when Chinese authorities were 
permitted to resume some of their administrative functions 
in the interior, there appeared a paper currency issued by 
the Chinese Government Bank in Moukden, payable in 
" small coin dollars." This currency, unstable as it is, 
offered some relief from the Yokohama Specie Bank mo- 
nopoly, and it was readily accepted by the people. In or- 
der to aid in establishing this currency, several prominent 
foreign hongs doing extensive business in Manchuria be- 
gan to make selling and buying prices in " small coin 
dollars." It is doubtful if any single measure of the Jap- 
anese military government In Manchuria has been more 
unpopular than its currency regulations. In some com- 
ment I noticed in Japanese newspapers, defending the 
course of the Government in this matter, It was claimed 
that abuses which might have occurred were actions of 
private parties, and that the Government Is not directly 
responsible. As all Japanese administrative machinery 
In Manchuria has been employed In helping the Yokoha- 
ma Specie Bank to retain control of the currency, to the 
extent of making Its notes and the " war notes " the only 
money accepted in connection with operation of the rail- 
ways, and other enterprises exclusively controlled by Jap- 
anese, this contention Is not very convincing. When 



244 THE FAR EASTERN QUESTION 

the new Yokohama Specie Bank note issue with which it 
replaced the " war note " was put into circulation, the 
Chinese were inclined to reject it, and reports that it was 
fiat currency were circulated; whereupon General Oshima 
Issued an official proclamation, in February, 1906, in 
which he warned Chinese that rumors calculated to im- 
pede ready acceptance of the new notes would cause 
the severe punishment of those who uttered them. 



CHAPTER XIX 

THE OPEN DOOR IN MANCHURIA — Concluded 

Test of This Commercial Principle — All Practical 
Conditions Here Defined — Accessibility of Manchuria 

— Causes for Trade Stagnation — Gradual Alteration of ^ 
Japanese Methods — JDip lomatic Pro tests — Normal Con- 
ditions Outwardly Restored — Petty Evasions Continued 

— Attempt to Injure Newchwang — Japanese Railway 
Rate Discriminations — The Fakumen Railway Dispute 

— Basis of Japan's Objections — Aulegeel-Seclret Clause <^!^~-^ 

— The Chinese Version — Weakness of Japan's Position 
r- — Relation of the Fakumen Question to the "Open 

7\ Door" Principle — Japan's Railways in Manchuria — 
Their International Status — Keeping the Chinese 
Railway Out of Moukden — Marketing Foreign Prod- 
ucts IN Manchuria — Situation of Japanese Traders. 

It is now assured that Manchuria will provide a test 
case of the " open door " commercial principle as It will in 
the future be applied in China. Every practical condition 
which may be presumed to circumscribe and define this 
proposition Is there found clearly expressed, even accentu- 
ated; and precedents which may be established by the 
course of events, and actual or passive assent of Interested 
trading nations, will exert great Influence upon, if they do 
not definitely denote application of the doctrine In all parts 
of the Empire. 

Upon returning to Manchuria In 1908 I found some 
changes. Until quite recently foreign trade passed In 

245 



246 THE FAR EASTERN QUESTION 

and out of the country chiefly through Newchwang, which 
port at one time almost monopoHzed the import and ex- 
port business of these provinces. The building of the 
Trans-Siberian railway gave Vladivostok access to the in- 
terior; the Chinese Eastern Railway developed Port Ar- 
thur and Dalny; the Antung-Moukden railway gives di- 
direct communication with Korea; -s.hile extension of 
the Imperial Railways of North China to Newchwang, 
Tsinmintun and Moukden has provided another inlet; so 
that to-day Manchuria is the most accessible part of China 
so far as transportation facilities are concerned. No 
other part of the Empire has so many treaty ports, and 
in no other provinces have the people had so much contact 
with foreigners, the prolonged Russian and Japanese oc- 
cupations and the China-Japan and Russo-Japan wars hav- 
ing completely broken through the isolation and provin- 
cialism which formerly existed. In some respects 
Manchuria is the most progressive and advanced part of 
China outside the larger treaty ports, and presents more 
favorable present opportunity for development. 

Yet in three years which followed the Russo-Japanese 
war the trade in Manchuria of foreign nations, excepting 
Japan and Russia, materially declined. Russia's trade 
always has been inconsiderable and remains about as it 
was, and Japan's trade shows an increase. The trade 
of the United States has fallen off, but still holds second 
place. In proportion to our total trade in China, Man- 
churia has been the best market for American products. 

It is not always easy to determine causes for sudden 
shifts in the balance of international trade, but in Man- 
churia some reasons are obvious. The war naturally 
caused partial commercial closure of the country while it 
continued. But the war ended more than three years ago, 
and a revival of business usually follows a period of hos- 




New Chinese Administration Building, Moukden. 




New Chinese School Building, Moukden. 



THE OPEN DOOR IN MANCHURIA 247 

tlllties. For more than a year after peace was declared 
the Japanese military authorities, having control of com- 
monly used avenues of ingress to Manchuria, practically 
estopped all foreign trade except their own from entering 
the country, and used this interval, by methods I have 
partly reviewed, to establish and promote Japanese trade. 
Not until complaints and protests of other foreign firms 
began to reach their governments did Japan modify this 
policy, then slowly, as pressure was put upon her, she 
has abandoned the more obvious and irritating discrim- 
inations. 

A history of the promotion of Japanese trade in Man- 
churia is interesting as illustration of what a Government 
can descend to, but may now be dismissed as a period of 
transition, and the present situation taken up. In certain 
important respects normal conditions affecting foreign 
commerce outwardly are restored. Chinese custom 
houses have been established at Dalny, Port Arthur and 
Antung; and on the Siberian border; and Russian and 
Japanese goods are now presumed to pay the Import tariff 
as well as other foreign articles, thus ostensibly removing 
one method of discrimination. Although there Is evidence 
that Japanese products which reach Korea through Gen- 
san are brought into Manchuria by way of Chien-tao 
(which Japan has occupied) without duty being paid, 
it is not likely that any large amount can be economically 
moved by this route, and such evasions may be placed in 
the category of ordinary smuggling. It is also alleged 
that Japanese products enter through Antung without 
paying duty, but not in large quantities. So it may now 
be assumed that all foreign products enter Manchuria, in 
so far as the tariff factor applies, on equal terms. 

In regard to the factor of transportation, Japanese 
products still have considerable advantage in that the 



248 THE FAR EASTERN QUESTION 

Japanese Government grants special rates for convey- 
ance from Japan by subsidized shipping lines; but this 
method is of questionable permanent economic value, and 
is recognized as legitimate. However, Japan owns and 
operates two railways penetrating into Manchuria: the 
South Manchurian Railway, which runs from Port Arthur 
and Dalny to Kwang-cheng-tze, with a branch to New- 
chwang; and the Antung-Moukden railway, which con- 
nects by ferry (a bridge will soon be built) with Japan's 
railways in Korea. During the Japanese military regime it 
was notorious that foreign products other than Japanese 
had great dijfficulty in getting transported on any terms, 
and often practically were refused transportation on ex- 
cuse that cars were not available, or were subjected to 
such delay that shippers and consignees were seriously 
handicapped. Complaints against these practices became 
so frequent and bitter that the administration felt com- 
pelled to desist from such transparent discriminations, and 
they gradually were abandoned for more subtle methods. 
Japan has made no secret of her desire to make Dalny 
the principal port for Manchuria, and for a time this 
object was openly pursued by striking at Newchwang. 
Dalny is situated in Japanese leased territory, which means 
that there Japan has a free hand and absolutely can de- 
termine port regulations and the conditions attending 
movement of cargo. Newchwang is a Chinese treaty 
port and is now again administered by Chinese authorities, 
which places Japanese shipping lines and commercial firms 
on the same footing as competing concerns. For a time the 
South Manchurian Railway gave a lower rate from points 
north of Tashihcha, (from where its branch goes to 
Newchwang,) to Dalny than it gave to Newchwang, al- 
though to Dalny is i6o miles longer haul. It also gave 
a lower rate from Dalny to points north of Tashihcha 



THE OPEN DOOR IN MANCHURIA 249 

than from Newchwang to the same points. Representa- 
tions by the Newchwang Chamber of Commerce to the 
foreign consular body there, and through It to Peking, 
finally induced the South Manchurlan Railway to equalize 
its rates via Dalny and Newchwang, although under ordi- 
nary circumstances Newchwang would have a cheaper 
rate. This matter has another bearing. Newchwang is 
also a terminus of a branch of the Imperial Railways 
of North China, which reaches Tslnmlntun and Mouk- 
den, and which can make a bid for business In a limited 
territory northward. 

With this explanation, the relation of the so-called 
Fakumen railway question to the principle of the " open 
door " In Manchuria may easily be understood. In No- 
vember, 1907, the Chinese Government made a contract 
with a British firm to have constructed an extension of 
the Imperial Railways of North China from Tslnmlntun, 
which Is now the northern terminus, to Fakumen. This 
extension had long been contemplated, being a step In 
the plan to reach the Amur, but Its projection was in- 
terrupted by the war. When the matter became known 
at Tokyo, the Japanese minister at Peking was Instructed 
to object to further extension of this line on the ground 
that It will Injure the South Manchurlan Railway. The 
protest of Japan Is based upon an alleged clause of a mem- 
orandum ^ which purports to be signed minutes of the 
conferences which attended the negotiation of the Ko- 
mura — Yuan-shih-k'al agreement defining the relations be- 
tween Japan and China, which was signed late In 1905.^ 

This matter Is of great Importance, and deserves eluci- 
dation. It may be recalled that in Article 4 of the Ports- 
mouth treaty, Russia and Japan " reciprocally engage not 
to obstruct any general measures common to all coun- 
Appendix D. 2 Appendix C. 



250 THE FAR EASTERN QUESTION 

tries which China may take for the development of the 
commerce and industry of Manchuria." In Article 3 of 
the same treaty occurs this clause: "The Imperial Gov- 
ernment of Russia declare that they have not in Man- 
churia any territorial advantages or preferential or exclu- 
sive concessions in impairment of Chinese sovereignty or 
inconsistent with the principle of equal opportunity." It 
should furthermore be remembered in this connection that 
in respect to the status of the South Manchurian Railway 
Japan's tenure fundamentally is based upon the original 
concession granted to the Russo-Chinese Bank, and, con- 
sequently, the above declaration of Russia, in a treaty 
jointly subscribed to by Japan, logically may be expected 
also to apply to Japan. 

Now comes Japan, basing her contention not upon the 
published convention between her and China defining 
Japan's status in Manchuria, but upon an alleged secret 
agreement now claimed to be part of the treaty, and ob- 
structs an undertaking which apparently is calculated " for 
the development of the commerce and industry of Man- 
churia." I could not obtain an official copy of this secret 
memorandum, but I am informed that the significant 
clause is phrased as follows : 

" The Government of China agree, with a view to 
protecting the South Manchurian Railway, not to con- 
struct prior to the recovery by them of the said railway 
any line in the neighborhood of and parallel to that rail- 
way, or any branch line which might be detrimental to the 
interest of the South Manchurian Railway." 

H. E. Tang Shao-yi, Governor of Feng-tien province, 
acted as secretary to the Chinese negotiators of the Komu- 
ra — Yuan convention, and attended every session; and 
from him I learned the following particulars : The above 
clause was proposed by the Japanese negotiators at a meet- 



THE OPEN DOOR IN MANCHURIA 251 

ing, and subsequently was discussed. The Chinese com- 
missioners objected to the incorporation of the clause in 
the treaty in that form, pointing out that its phraseology 
is ambiguous and indefinite; that "in the neighborhood 
of " and " parallel to," and " which might be detrimental 
to the interest of " can be stretched to include any con- 
ceivable extension of Chinese railways In Manchuria. 
The Chinese negotiators expressed themselves as willing 
not directly to Invade the territory of the South Man- 
churlan Railway with a view to undermining its business, 
and suggested that a clause be drafted definitely fixing 
the distance which would be considered as paralleling it, 
or one stating that American and European usage shall be 
considered as applying if any controversy should arise. 
The Japanese negotiators objected to any more definite 
phrasing of the clause, suggesting that In such form It 
might be construed as indicating an intention by Japan 
to limit China's development of her own territory. The 
Chinese negotiators declined to assent to the clause in the 
form proposed, and the discussion was dropped. It con- 
sequently did not appear in the treaty. But, as one of the 
various matters proposed and discussed, It does appear in 
minutes of the proceedings, which, as is usual under 
such circumstances, were approved and signed by the plen- 
ipotentiaries; and as a part of these minutes Japan now 
contends that this clause is binding upon China. Thus 
Japan voluntarily assumes a position before the nations 
of having induced or coerced China to cede, In a secret 
agreement, rights In direct contravention of the principle 
of equal opportunity in Manchuria to which all interested 
powers are pledged. 

Granting for sake of the argument that this secret 
clause now may properly be read into the treaty, China 
contends with considerable reason that the proposed ex- 



252 THE FAR EASTERN QUESTION 

tension is not a violation of it, pointing out the following 
facts: The nearest point of the proposed line to the 
South Manchurian Railway is 35 miles distant; the two 
lines are divided by the Liao river, forming a natural 
trafiic boundary; the trade of the region to be served by 
the proposed line always has gone and now goes to Tsin- 
mintun; that in so far as it affects the business of the South 
Manchurian Railway the proposed extension will operate 
as a "feeder" rather than a detriment; that the region 
to be entered now has no railway facilities, that such facil- 
ities are necessary for its development, and that in no civ- 
ilized country in the world would such a line be con- 
sidered an infringement of another franchise. These ar- 
guments cannot easily be refuted; but Japan, nevertheless, 
objected, and for the time the project is arrested. 

If Japan succeeds in enforcing her position it means 
that China must wait for fifteen years, until she has the 
right to recover all foreign railways in Manchuria, which 
is assured by treaty, before beginning construction of the 
Kirin branch or any projects needed to develop the coun- 
try. In presenting Japan's position in this matter the Jap- 
anese official press frankly admitted that Japan's interpre- 
tation of the secret supplementary clauses of the Komura — 
Yuan convention implies that there cannot be any railway 
finance or construction in southern Manchuria except un- 
der her direction; which is as concrete a contravention to 
both the spirit and letter of the " open door " principle 
as well can be conceived. Japan's attitude even warrants 
suspicion that she is attempting to pave the way to perma- 
nently retain her hold in the country, and that when the 
time to turn the South Manchurian and Antung-Moukden 
railways over to the management of China comes an ex- 
cuse will be found for failing to comply with the treaty. 

The relation of the Fakumen question to the " open 



THE OPEN DOOR IN MANCHURIA 253 

door " principle Is almost self-evident. Should the Im- 
perial Railways of North China be extended to the Amur, 
with a spur eastward to Kirin, as has long been contem- 
plated, it will provide a direct route by which products 
can enter or leave Manchuria through the ports of New- 
chwang and Chln-wang-tao, which Is the only port In 
the Gulf of Llao-yang that Is open through the winter. 
This would make It difficult for Japan to use the South 
Manchurlan Railway as an agency for favoring Japanese 
trade In the country, as she has done In the past and is 
still to some extent doing. There Is no doubt that Chi- 
nese and foreign shippers on the South Manchurlan and 
Antung-Moukden railways have been handicapped In many 
ways. It Is not feasible directly to prove that rebates are 
given to Japanese shippers, which usually more than 
amount to a remission of Import duty, but In many 
cases circumstances demonstrate the wholesale existence 
of this Insidious form of discrimination. Chinese and for- 
eign shippers frequently have difficulty In getting cars, 
sometimes have to wait for weeks, while Japanese com- 
petitors are promptly supplied. Invidious detriments like 
this are hard definitely to fix, but they are annoying, and 
often seriously handicap trading firms which are compelled 
by circumstances to ship by Japanese railways. Man- 
churia easily can provide business for several railway 
lines, for any line has a tendency to create Its own business 
by developing the country through which It passes and to 
bring new business to connecting lines; and another rail 
outlet to the south will mean that the South Manchurlan 
Railway cannot so easily continue to favor Japanese ship- 
pers, because other shippers will have an alternative route. 
Application of the " open door " principle to the 
operation of Japanese railways In Manchuria, which all 
the powers have the right, under the Hay Agreement, to 



254 THE FAR EASTERN QUESTION 

insist upon, cannot interfere with legitimate encourage- 
ment which Japan may wish to extend to her trade there. 
It evidently is not feasible to prevent Japan from favoring 
her nationals there in the matter of transportation when she 
controls several avenues of ingress over their entire route. 
For instance, Japanese merchandise may pay the open rate 
over Japanese railways in Manchuria, but no one can ob- 
ject if Japan subsidizes shipping lines to carry such prod- 
ucts without charge, or operates a virtual rebate by reduc- 
ing railway rates in Japan. The result to Japanese ship- 
pers will be the same no matter what form the rebate or 
subsidy may assume. Such encouragement as this even- 
tually will fall upon the taxpayers of Japan, and if they can 
be induced to tolerate it, foreigners have no legitimate 
reason to complain. If Japan's fiscal situation can stand 
the strain, Japan might pursue a policy of transporting 
Japanese products to all countries free of charge. But 
when they enter other countries, where Japan is not en- 
titled to preferential treatment, they should be transported 
and marketed under the same conditions as other foreign 
products. So In Manchuria other trading nations have a 
right to Insist that Japanese railways afford equal facilities 
to shippers regardless of nationality, and that they shall 
not be permitted to establish a transportation monopoly 
under cover of which subtle forms of discrimination easily 
can be practiced. 

A good example of Japan's attitude Is afforded at 
Moukden. The line of the South Manchurlan Railway 
passes three miles west of the walled city. During the Jap- 
anese military occupation a large tract of land lying be- 
tween the city and the railway station was occupied, In 
many cases without reimbursing Chinese owners, which 
now Is laid out In a Japanese settlement over which Japan 
asserts administrative authority. The Japanese military 



THE OPEN DOOR IN MANCHURIA 255 

authorities caused to be built, out of Chinese revenues, a 
fairly good road between the city and the station, on which 
now plies a line of horse cars, and which is the only direct 
traffic avenue available for communication with the 
city. When the Imperial Railways of North China was 
extended to Moukden, in 1907, the Chinese authorities 
wished to establish the station near the city. To do 
this it is necessary to cross the line of the South Man- 
churian Railway. When this was proposed the Jap- 
anese Government, through its Consul-General at Mouk- 
den, positively objected; and so the Chinese station is now 
a temporary affair just west of the South Manchurlan 
Railway tracks, which lie between the Chinese terminus 
and the city and virtually cut it off. When I w^as last In 
Moukden passengers for the Chinese railway must walk 
across the tracks and sidings of the Japanese line to reach 
their trains, and luggage must be carried over by coolies. 
Freight arriving and leaving Moukden by the Chinese 
road must be got across the tracks of the Japanese line 
either by coolies or cart, and part of the time the way 
is blocked by Japanese trains. Frequently strings of 
freight vans are left standing for hours while Chinese 
carts and coolies engaged in transporting freight be- 
tween the Chinese station and the city are detained. 
Since such a condition adds greatly to the difficulty of 
transportation, and consequently to its cost, it operates as 
a detriment to shippers by the Chinese railway and tends 
to deflect business to the Japanese line. " By what right 
does Japan prevent the Chinese line from crossing its 
right of way to get to Moukden?" does someone ask? 
One hardly knows. Japan simply objects, and Japanese 
troops are there to see that her wishes are enforced ; while 
China has not dared to force the issue. Denial to Chi- 
nese railways of the right to cross the Japanese line 



256 THE FAR EASTERN QUESTION 

amounts feo specific reservation by Japan to herself of the 
whole of eastern Manchuria. 

There remain to be considered conditions which now 
attend the marketing of foreign products in Manchuria. 
During the military occupation thousands of Japanese im- 
migrants settled outside the treaty ports, where they are 
now engaged in business. This is contrary to the treaties, 
and Chinese officials have strongly protested, but so far 
in vain. The Japanese Consul-General at Moukden has 
refused to interfere with these Japanese traders, and the 
Chinese authorities have not dared to attempt to exercise 
police power over them. Japan has taken an attitude 
entirely disregarding treaty provisions in this matter, and 
there are indications that she expects to enlist the sym- 
pathy of other trading nations. Japanese intimate that 
this is not a violation of the " open door " principle, and 
really is an extension of it by opening the whole coun- 
try to foreign trade. It is true that such a policy would 
have this effect if other nations, disregarding China's pro- 
tests and their treaty obligations, also adopted it, and per- 
mitted their nationals to locate and do business wherever 
they choose. But most other nations are inclined to re- 
spect their treaties with China ; and if an American citizen 
opens a shop in a non-treaty town his nearest consul, upon 
representation by the Chinese authorities, promptly will 
compel him to move. The policy of Japan, therefore, 
presents to other nations the alternatives of following her 
example by ignoring their treaties, of assenting to a con- 
dition more favorable to Japanese commerce in compari- 
son with their own, or of supporting China against Ja- 
pan's aggressions. It is probable that if China is 
compelled to yield in this matter in Manchuria it even- 
tually will mean that she must do the same throughout the 
Empire. 



THE OPEN DOOR IN MANCHURIA 257 

Meanwhile, the condition exists, and some of its effects 
are Interesting. Japanese immigrants in Manchuria still 
refused as late as the fall of 1908 to pay likin and other 
local Chinese taxes. Attempts of local Chinese officials 
to collect these taxes from Japanese Invariably have been 
futile; and Chinese police dared not interfere in such 
cases, for It would speedily bring a detachment of Japan- 
ese troops to the scene and might lead to humiliation 
of the Chinese officials. Japanese officials in Manchuria 
and at Tokyo deny that Japanese in Manchuria are ac- 
corded more favorable treatment in these matters, but the 
condition as I have described It extensively exists. When 
I was last in Manchuria, in 1908, a Japanese merchant In 
a non-treaty town attempted to secure the agency at that 
place for a foreign firm by claiming that he can represent 
it to better advantage than Its Chinese agent because he 
(the Japanese) does not have to pay likift. The offer 
was not accepted, and the Incident was reported to the 
proper authorities, but with no result. Distribution of 
these Japanese throughout the country might In time con- 
tribute to its development If they brought with them a 
higher commercial morality and better business methods. 
But quite the opposite Is true. 

While a steady though slight Improvement in the com- 
mercial situation Is apparent, and in most matters the 
" open door " technically Is observed. Its spirit is still 
violated In many ways. It Is not possible longer to re- 
main in doubt about the real policy of Japan; which 
clearly Is to retain as close hold in Manchuria as other na- 
tions can be Induced to tolerate, and to use this grip, by 
fair and illegitimate means, to establish Japanese Interests 
in a position of supremacy. As time passes, and special 
privileges which Japanese Immigrants had under the mili- 
tary regime are wholly or in part modified, It becomes 



25 8 THE FAR EASTERN QUESTION 

evident that Japanese commerce cannot make much head- 
way in Manchuria, in comparison with that of some other 
foreign nations, strictly on its merits. There are less Japa- 
nese in Manchuria than were there two years ago, an offi- 
cial census in 1908 giving a total of 27,342. Many 
substantial buildings which were erected in the Japanese 
settlements are unoccupied. The truth Is that Japa- 
nese merchants in large numbers have no legitimate basis 
for existence in China, for Chinese are more astute and 
reliable traders, and under equal conditions they will more 
than hold their own. The Tokyo Government realizes 
that Japanese in China require extraordinary assistance in 
order to retain the foothold which was secured during and 
immediately after the war, and this partly explains its 
policy in Asia. 



CHAPTER XX 

POLITICAL ISSUES IN MANCHURIA 

Present State of the Country — China's Efforts to 
Recover Autonomy — Policies of the Viceroys — Japa- 
nese Evacuation of Moukden — Troops Withdrawn — 
Slight Alteration of Political Status — Japan's Grip 
Retained — Japanese Garrisons — Issues Between China 
AND Japan — China's Authority a Fiction — The Ques- 
tion of Railway Administration — Claims of Russia and 
Japan — Basis for These Claims — The Chinese Eastern 
Railway Agreement — This Instrument Analyzed — 
Railway Settlements — The Issue at Harbin — Railway 
Administrative Zones — Usurpation of Chinese Adminis- 
trative Functions — Posts and Telegraphs — Lawless- 
ness OF Japanese Immigrants — The Antung-Moukden 
Railway — Chinese Sovereignty Overruled. 

When I last visited Manchuria three years had passed 
since Russia, and Japan, making peace at Portsmouth, 
agreed to evacuate those provinces and to restore them to 
the administration of China; yet I found the country, while 
nominally a part of China and subject to her sovereignty, 
politically divided into two parts — the Russian and Jap- 
anese spheres of influence. There is no substantial dif- 
ference in the political status of these spheres, but the 
policy of Japan is being more aggressively promoted, has 
for the moment greater significance, and still affords an il- 
lustration of tendencies and purposes in both. 

Although it had several times previously been an- 
nounced that Japan was fulfilling her treaty obligation, 

259. 



26o THE FAR EASTERN QUESTION 

and had restored the part of Manchuria then occupied by 
Japanese armies to " the exclusive administration of 
China," it was not until December, 1906, that Japanese 
troops were withdrawn from Moukden, Newchwang and 
other important places, and Chinese autonomy outwardly 
resumed. At that time Japanese had occupied southern 
Manchuria over two years, and the military authorities 
had used this period to establish Japanese in possession 
of all property formerly owned, occupied or claimed by 
the Russians; to occupy themselves much Chinese prop- 
erty to which the Russians never had asserted claim; to 
establish thousands of Japanese immigrants in the coun- 
try by according to them more favorable treatment in 
comparison with Chinese or other foreigners; and to lay, 
by arbitrary seizure, foundations for subsequent claims to 
valuable mines and concessions. 

This so-called evacuation was not made, however, until 
Japan had used her military control of the country to put 
pressure upon China with a view to firmly establishing 
Japanese interests there. The Komura — ^Yuan agreement 
was negotiated while Japan was in full control, which put 
China in the real attitude of bargaining to regain posses- 
sion of her own territory. In scrutinizing this agreement ^ 
it appears that in some important matters it is intention- 
ally ambiguous. Japan probably did not then desire to 
appear to press China too severely, but refused to relax 
her hold until foundation for further negotiation was laid. 
This agreement was signed late in 1905, and by its terms 
Japan specifically agreed to begin evacuation of Man- 
churia immediately, and not to wait upon full expiration 
of the time limit (March, 1907) fixed by the Portsmouth 
treaty. But for another year after it was signed Japan 
retained her tight grip. The reason is obvious. During 

1 Appendix C 



POLITICAL ISSUES IN MANCHURIA 261 

this period supplementary negotiations were progressing 
at Peking, and Japan was making the fulfillment of her 
promise a condition of China's yielding in other matters 
which Japan was pressing upon her. 

Late in 1906 the Peking Government sent Prince 
Tsal-chen to Manchuria to investigate conditions and re- 
port upon a plan to reorganize Chinese administration of 
the three provinces and consolidate Chinese power to re- 
sist Russian and Japanese aggression.^ In attempting to 
pursue this policy, Chao Ehr-sun, then Tartar General at 
Moukden, soon developed friction with the Japanese au- 
thorities. H. E. Chao seems to have been intensely anti- 
Japanese, and In dealing with the Japanese authorities was 
alternately swayed by dislike, which inclined him to be 
over-aggressive, and timidity, which made him too yield- 
ing. Upon representation of Japan at Peking, H. E. 
Chao was transferred to another post and Hsu Shih-chang 
was appointed. About the same time Tang Shao-yl was 
appointed Governor of Feng-tlen province. H. E. Tang, 
who studied at Columbia University, Is one of the more 
enlightened and progressive officials In China, and from 
the time he arrived at Moukden he virtually had charge 
oi relations between the Chinese and Japanese authori- 
ties. H. E. Tang Is thoroughly familiar with circum- 
stances relating to Japan's position In Manchuria, having 
been secretary of the board which negotiated the Komura 
— ^Yuan treaty. This shift in administration occurred In 
June, 1907. 

On my second visit to Manchuria since the war ended 
I could notice slight alteration of the general political 
status, although the situation is constantly being modified 
by the course of events, and outward evidences of Japa- 
nese occupation were less conspicuous. Japanese troops 

2 Appendix E. 



262 THE FAR EASTERN QUESTION 

in the country had been reduced. The garrisons which 
when I was last there, eighteen months before, were main- 
tained at ISloukden, Liao-yang, Newchwang, Tiding, 
Tsinmintun and Kirin had been withdrawn. Moukden 
was the last important place evacuated, the troops being 
withdrawn from the city in April, 1907. As the Japanese 
military grip was relaxed, Chinese administrative processes 
gradually resumed their functions, and now perform 
ordinary governmental duties throughout the country 
with some limitations and exceptions. 

But these limitations and exceptions, when examined, 
reveal that Manchuria still is far from being restored to 
the exclusive administration of China. Japanese garri- 
sons remain at Antung; at the Fu-Shun, Pen-shui-hu and 
other mines; and in Chien-tao. Japanese troops (railway 
guards) are garrisoned along the railways and at all rail- 
way stations and settlements. Japan also has covered 
the country with a web of consulates. In the Japanese 
sphere, there is a consulate-general at Moukden, consulates 
at Kirin, Newchwang and Antung; consular agencies at 
Liao-yang, Tsinmintun, Fakumen, Tiding, Kwang-cheng- 
tze, Feng-wang-cheng and Kaiping. In the Russian 
sphere, Japan has a consulate-general at Harbin, and 
consular agencies at Tsitsihar and Manchuli. At most 
places where Japan has established a consular representa- 
tive also is a consular guard, which means that small gar- 
risons thus are distributed over the country. There is no 
actual need for these troops. They are not considered 
necessar)' by British, American, German and other foreign 
governments which have consulates in Manchuria. 

The political situation in Manchuria may be summa- 
rized by enumerating the chief matters now at issue be- 
tween China and Japan. These are : 



POLITICAL ISSUES IN MANCHURIA 263 

1. The failure of Japan to restore to Chinese subjects 
private property which was seized and used for mihtary 
purposes during the war. 

2. The refusal of Japan fully to restore to China's 
administration the posts and telegraphs in Manchuria. 

3. The refusal of Japan to restore to Chinese owners 
valuable mines and timber preserves which were seized 
during the war. 

4. The failure of Japan to restore to Chinese owners 
and to Chinese administration land and other property 
adjacent to the railway right of way which was seized 
by Japanese military authorities during the war. 

5. The refusal of Japan to permit the extension and 
construction of Chinese railways in Manchuria. 

6. The refusal of Japan to limit the residence and 
commercial activity of Japanese subjects In Manchuria to 
treaty ports. 

7. The claims of Japan that Japanese have equal 
rights with Chinese to work the coast fisheries and to 
import salt Into Manchuria. 

8. The claim by Japan (and also Russia) that her 
political authority In Manchuria is coextensive with all 
property owned by or operated In conjunction with the 
Japanese railways, and also' extends to railway settle- 
ments. 

9. The acquisition by Japan of large tracts of land 
which she is now converting into residential concessions, 
and over which she claims administrative authority. 

10. The protection by Japan of Japanese In evasions 
of Chinese taxes and administrative regulations, and in 
usurpation of the property of Chinese. 

Commercial aspects of some of these matters, such 
as those Involved in tax evasions and railway discrlmina- 



264 THE FAR EASTERN QUESTION 

tions, and which directly affect foreign trade interests In 
the country, akeady have been discussed; so the inquiry 
now may be confined to political aspects of these questions. 
That such questions now exist conclusively demonstrates 
that alleged restoration of Chinese autonomy is a fiction. 
Can anyone conceive such questions being diplomatically 
discussed by the United States concerning similar matters 
within its territory? All matters concerning Manchuria 
now under discussion between China and Japan, except 
the Chien-tao and fisheries questions, belong within the 
scope of a nation's internal political sovereignty, and for 
a foreign power to raise them at all is tantamount to dis- 
puting the existence of this sovereignty. The questions 
of property and franchise rights clearly He within the do- 
main of jurisprudence, which is an administrative function 
fundamental to sovereignty; or, if an exception be made 
of China's case, they belong in a court of arbitration. 
Functions like police power, administration of posts and 
telegraphs, taxation and regulation of commerce and in- 
dustry, all are inherent with the political sovereignty of a 
state ; and that China's authority In these matters is limited 
and disputed by Japan proves that real authority In south- 
ern Manchuria does not now lie with China, but with 
Japan. 

Of questions which directly Involve sovereignty, the at- 
tempt by Russia and Japan to stretch authority to regulate 
their railways into political administrative power prob- 
ably is more Important. This alleged right is based upon 
a clause granting to the Russo-Chlnese Bank a franchise 
for the Chinese Eastern Railway, as the line from Harbin 
to Port Arthur formerly was called, and the southern part 
of which now forms the South Manchurlan Railway; for 
Japan bases her claim as an inheritor of the rights of the 
original grantees. This case well may serve for illustra- 



POLITICAL ISSUES IN MANCHURIA 265 

tion of methods employed by both nations to extend Rus- 
sian and Japanese influence in Manchuria, and to under- 
mine China's autonomy. It is essential to remember that 
this franchise was not granted to the Russian Government, 
but to the Russo-Chinese Bank, a corporation composed 
jointly of Russians and Chinese, and in which both govern- 
ments are interested to the extent of providing capital. 
Article I ^ of the agreement for the construction and man- 
agement of this railway which was signed August 29, 
1896, says: "China and Russia establish a company 
. . . to construct and manage this railway. . . . 
The Director -of the Company will be appointed by 
China. . . . All business between the Company and 
the Chinese Government or any Chinese officials, either 
in Peking or the provinces, will also be managed by the 
Director." The clause upon which the Russo-Japanese 
claims of administrative authority are founded, is given 
in full. 

" Article 6 — As regards the land required by the 
Company for constructing, managing and protecting the 
line and adjacent land, for procuring sand, earth, stones 
and lime, if the land be Government land it will be given 
to the Company without payment. If privately owned, 
the Company will provide funds for payment to the pro- 
prietors at market rates, either in one payment or as 
yearly rent. All the Company's land will be exempted from 
land tax. As soon as the land comes under the manage- 
ment of the Company they may erect thereon any build- 
ings and carry on all kinds of work, and they may establish 
a telegraph line thereon worked by the Company for the 
Company's use. With the exception of mines, for which 
special arrangement must be made, all receipts of the 

3 Appendix K. 



266 THE FAR EASTERN QUESTION 

Company for transport of passengers and freight, tele- 
grams, etc., will be exempt from taxation." 

This is the exact phraseology of the clause as it is pub- 
lished in open records of this agreement. However, it 
now appears that a copy was made in French, which 
Russia contends is the official copy, and which it is claimed 
gives the Company the right to police and administer the 
railway settlements. China contends that Li Hung 
Chang, who negotiated the agreement for China, did not 
understand French, and that this alleged clause was in- 
serted without his knowledge; moreover, that it cannot 
rightly be construed as granting to Russia administrative 
control over any part of Manchuria, since the agreement 
is with a corporation, not a government. 

Briefly stated, this is the foundation for Russia's claim 
to administer the settlements along her part of the rail- 
way, of which the more important is Harbin. When this 
point was selected for the junction of the Port Arthur 
branch of the Chinese Eastern Railway with the main line 
no town existed there; but one quickly grew. Partly by 
purchase, partly by appropriation, the Russian railway ad- 
ministrators added to the town, until Harbin and its sub- 
urbs now include 45 square miles of territory, over which 
Russia claims political authority. The opening of Har- 
bin as a treaty port, and establishment there of foreign 
consuls, has raised the question of their status; that Is, are 
they amenable to Russian or Chinese political sovereignty? 
This question became an Issue In 1908 between the United 
States, Russia and China regarding the position of the 
American consul at Harbin. 

China contends that such administrative powers as were 
conferred upon the Company only meant strictly railway 
property, needed for and actually used in operating the 



POLITICAL ISSUES IN MANCHURIA 267 

railway; and cannot reasonably be construed to Include 
towns and cities, large and small, which may grow or 
which already lie adjacent to the line. It Is indeed diffi- 
cult, when all the circumstances are considered, to conceive 
a more flimsy pretense than Russia's contention in this 
matter. And it is humorous to find Japan, which con- 
sidered this and similar actions by Russia reason to gO' to 
war to oust her from Manchuria, now advancing the same 
claim in her own sphere. In constructing this railway 
through southern Manchuria the Russians laid out and 
secured, chiefly by purchase from Chinese owners, ample 
sites for settlements adjacent to the stations, and these 
were Inherited by Japan. During the Japanese military 
occupation these settlements were greatly extended. At 
Moukden, Llao-yang and Newchwang especially were 
large " concessions " laid out. The status of these so- 
called " concessions " is now in dispute between China and 
Japan. Japan claims the right to administer them, while 
China contends that, as in the case of Russia in the north, 
Japan's administrative authority does not extend beyond 
what properly may be included In the railway right of way. 
Japan tentatively has intimated that she considers her 
railway right of way, or " zone," as being an extension of 
her leasehold on the Kwang-tung, which she also inherited 
from Russia. To sum up this question, if the claims of 
Russia and Japan In this matter are established, It will 
establish a strip of territory, Including many important 
towns, dividing Manchuria like a huge T, and over which 
China can exercise no political sovereignty whatever. 

Nor has Japan, in her sphere, been content with locat- 
ing residential "concessions" adjacent to the railway; 
she has established herself in possession of suitable sites In 
other localities, as at Kirin, Antung and Feng-wang-cheng ; 
and which she demands that China officially recog- 



268 THE FAR EASTERN QUESTION 

nize. To these places, and wherever Japan has estab- 
lished consulates or consular agencies, the Japanese post 
and telegraph was extended against the protest of 
China. Japan entered into an agreement with Russia 
whereby mails brought by the Russian railway are de- 
livered to Japanese instead of to Chinese postal authori- 
ties for distribution, thus ignoring China's sovereignty. 
Japan also refused to carry Chinese mails at a reduced 
rate on the South Manchurian Railway, taking the posi- 
tion that the Japanese post will handle all mail over this 
route. Japanese officials have opened Chinese mail bags 
at Liao-yang and Moukden before delivering them to the 
Chinese post office. The Japanese have established let- 
ter boxes in Moukden and in other cities, and Japanese 
mail carriers travel at will over the country. Chinese 
posts in Manchuria are under the direction of foreigners 
and afford very good service; better as a rule than Japa- 
nese posts; and there is no legitimate reason for Japan's 
usurpation of China's prerogative in this important admin- 
istrative function. Japanese telegraphs, which were es- 
tablished for military purposes during the war, are con- 
tinued as commercial ventures in competition with the 
Chinese Imperial lines, and against China's repeated pro- 
tests. Although Japan specifically agreed, in the Komura — 
Yuan convention, to restore to Chinese owners all prop- 
erty which had been commandeered for military uses 
during the war, this has not yet been done, and many 
buildings are rented to Japanese merchants at a nominal 
rental, while Chinese owners cannot get possession. 

The injection into the country of Japanese immigrants 
has caused unnumerable complications. Fortunately the 
austere days of the military regime, when Chinese were 
summarily ejected from their homes and their property 
confiscated by these unwelcome intruders, have now 




Camel Cart, Mongolia. 




Chinese Outpost in Mongolia. 



POLITICAL ISSUES IN MANCHURIA 269 

passed; but it Is the settled policy of Japanese officials 
to support their nationals In Manchuria In any circum- 
stances. Moukden and other cities are now policed by 
Chinese, and life and property are as safe as In Peking. 
The lawless element which is hardest to control are Japa- 
nese, who habitually Ignore the authority of Chinese police 
and rarely will submit to arrest by them. Recently, 
owing to frequent collisions and brawls, the Japanese Con- 
sul-General at Moukden objected to the carrying of lire- 
arms during the day by Chinese police, and the Chinese 
authorities were forced to accede to this extraordinary 
demand ; but Japanese soldiers carrying bayonets and rifles 
are constantly seen about the streets. Even Japanese 
coolies are disposed to disregard Chinese authority, and 
also the Immunity which is presumed to attend foreign con- 
sular representatives. Unwarranted Invasions In 1908 of 
the German and American consulates by Japanese coolies 
who became embroiled with the Chinese servants were ex- 
amples of this disposition which attracted International no- 
tice, and evoked apologies from Japan; but Chinese, as a 
rule, have to endure such indignities. There Is no doubt, 
however, that the presence In Manchuria of foreign con- 
suls has the effect of stiffening the nerve of Chinese au- 
thorities, and acts to discourage and deter Japanese and 
Russian political aggressiveness and Impositions on the 
Chinese population. 

The status of the Antung-Moukden railway may be- 
come a serious issue between Japan and China, and in 
many respects it is typical of Japan's method of acquiring 
" Interests " in Manchuria. During the war the Japa- 
nese army, as it advanced, constructed a light railway to 
open communication with Its base on the Yalu; and 
Japan Insisted that she be permitted, after the war, to 
reconstruct this line and operate it. China agreed to this 



270 THE FAR EASTERN QUESTION 

provided the railway be reconstructed within two years 
after Japan's mihtary evacuation of the country. This 
officially occurred in December, 1906, and so the time 
limit expired In December, 1908. The line has not been 
reconstructed, is still in the general state it was when the 
agreement was signed, and the Japanese Diet has failed to 
authorize its construction. Japan has intimated, how- 
ever, that she does not feel bound to complete recon- 
struction within the limit fixed, and will decline to re- 
linquish her concession. China is herself anxious to build 
this road as an extension of the Imperial Railways of 
North China, but there Is slight prospect that she will be 
permitted to do so. 

When the right to build the Antung-Moukden line was 
granted to Japan, she demanded In conjunction with It a 
general mining concession on both sides of the right of 
way, but when she refused definitely to delimit the 
extent of this area China declined further to discuss the 
matter. This did not prevent Japanese from seizing a 
number of coal mines In the district, which belonged to 
Chinese, and which are still held by the South Man- 
churian Railway, on various pretexts, as part of its assets. 
The basis of Japan's claim to some of these properties 
are too complex here to be explained; but they demonstrate 
that her policy In these matters Is first to seize by military 
force, then to trade upon her vantage of possession. Chi- 
nese owners of valuable coal mines have now been kept 
out of their property for years (which meanwhile Is 
worked by Japanese) and have small prospect of an equit- 
able recovery. 

Notwithstanding the anomalous political situation of 
the country, It Is possible to note many evidences of pro- 
gress In Manchuria, especially in Moukden, the ancient 
capital of the Manchu kings. Moukden now has paved 



POLITICAL ISSUES IN MANCHURIA 271 

streets, a horse tram-line, a telephone system, many new 
private and public buildings; and electric light and water 
works probably will be supplied within a year. There 
are now five foreign consulates; an international club, 
which, by the way, is the first foreign club In China to 
admit Chinese and has a dozen or so members among the 
higher officials; an " Astor House" hotel; a permanent 
industrial exhibition; and several foreign commercial 
firms. I noticed many foreign articles In the shops which 
were not formerly to be seen, among them automobile 
masks and goggles. These are excellent protection to 
the eyes during dust storms, and I think I was first to 
wear them In Moukden, several years ago, for I remem- 
ber the attention I then attracted. There Is even a Chi- 
nese company which erects billboards and rents advertis- 
ing space. The old city has been discovered by the 
tourists, (for Moukden Is now a railway center) who 
may be seen rummaging about the Chinese shops, where 
alongside of wares of the country are now displayed 
picture post-cards of palaces, tombs and execution scenes. 
Some shop signs are In English. A regretable result of 
progress Is that in grading and draining the wider streets 
It was necessary to remove many of the huge shop signs 
which are peculiar to Manchuria, and which formerly 
gave the city such a unique and distinctive appearance. 

Much as one might like to think so. It Is not possible 
to believe that there has been any substantial restoration 
of China's sovereignty in Manchuria. The grip of Japan 
and Russia Is somewhat relaxed, but can be tightened at 
an Instant's notice, and Is whenever occasion demands Its 
assertion in Issues with China, and which are not likely to 
attract International notice. Negotiation required to clar- 
ify the situation has been for some time at a pause, with 
China afraid to Insist upon a settlement until she Is better 



272 THE FAR EASTERN QUESTION 

assured of external support, while the powers in occupa- 
tion are willing not to disturb a condition which gives 
them substantial control of the country. The course of 
events there sickens those who may try to believe that 
international promises afford any true basis for estimating 
policies and results. 

In reviewing the entire situation in the Far East one 
can hardly escape an impression that the Issues involved 
in Manchuria present, for the moment at least, the real 
crux of the Far Eastern Question. If there has not by this 
time penetrated to the United States some fairly accurate 
comprehension of what may be expected of Japan and 
Russia, should they be permitted further to pursue their 
desires in eastern Asia without the limitation of outside 
pressure, it may be that realization will come too late to 
prevent permanent Injury to American Interests in that 
part of the world. Few persons, even in the United 
States, seem to know that about half of American trade 
In China is, or formerly was. In Manchuria. The great 
decrease In our trade with China since 1905 has been 
noted, and there have been numerous attempts to ex- 
plain it, among which the now moribund boycott has had 
a prominent position. The Japanese closure of Man- 
churia, which caused large stocks of American prod- 
ucts that had been accumulated In anticipation of a great 
demand when the war ended to remain stagnant In 
godowns at Shanghai and Tientsin, and which was a prin- 
cipal cause of the existing depression, has almost been 
ignored. Matters to be adjusted in Manchuria affect all 
nations trading with China, but In regard to this particu- 
lar locality the United States has most at stake of the so- 
called outside powers. When the war between Russia 
and Japan began, American trade In Manchuria exceeded 
that of any other three nations, excepting Japan, and there 



POLITICAL ISSUES IN MANCHURIA 273 

is no reason why this position cannot be maintained or 
even improved under equitable conditions. 

That foreign trade and property rights are now suffer- 
ing, and will continue to suffer while conditions remain as 
they are, cannot successfully be disputed. It seems to me 
that unless certain points are definitely adjusted by means 
of, if necessary, international pressure upon the powers in 
occupation, the " open door " in Manchuria will continue 
to be a hollow sham, and may lead to dismemberment of 
China. 



CHAPTER XXI 

RUSSIA IN EASTERN ASIA 

Russia's Repulse — Her Post-bellum Position — Revis- 
ing Her Eastern Policy — Russia's Position in Man- 
churia — Her Commercial Policy There — Contrast 
With Japan — The Door Opened — Russia and Japan — 
Issues Between Them — Railway Administration — The 
General Convention of 1907 — This Document Analyzed 
— Railway Strategy in Manchuria — The Position of 
China — Baron Goto's Visit to Russia — Russia's Advan- 
tage — Conditions in the Russian Sphere — Harbin — 
Russia's Real Attitude. 

Since termination of the war with Japan the policy 
of Russia in eastern Asia has lapsed into comparative ob- 
scurity. Several influences have contributed to bring this 
about. One is the popular idea that Russia was so griev- 
ously worsted by Japan, and her military resources so ex- 
hausted that she will be seriously crippled for many years ; 
another is a belief that internal troubles will not permit 
her to prosecute a vigorous external policy; still another 
is the belief that her finances are in a state which compels 
retrenchment, and that this condition will force the Gov- 
ernment to defer or abandon any schemes that will involve 
great expense. 

None of these generally accepted theories is entirely 
correct. The end of the war found the Russian army 
still able to interpose formidable opposition to the Japa- 
nese advance; indeed, it is now apparent that Russia was 
fully as well prepared to continue the war as was Japan. 

274 



RUSSIA IN EASTERN ASIA 275 

When peace was made the Japanese armies were still far 
from Russian territory, and had slight prospect of secur- 
ing lodgment there except at further great sacrifices of 
men and money. Russia made peace not because she was 
crushed, but because circumstances made such a course 
pohtic. She had merely been repulsed, not beaten; and 
her statesmen felt that the time was not propitious for 
continuing the struggle in the East. 

Peace with Japan having been made. It was necessary 
for Russia to revise her eastern policy to meet the new 
conditions, and this she set about at once. It may be pre- 
sumed that Russian statesmen never have had any delu- 
sions regarding the real purpose of Japan's continental 
policy, nor about Japan's object in expelling Russia from 
Korea and southern Manchuria. It is evident that Rus- 
sia's eastern policy must now consider Japan's position on 
the continent. Korea was for the time eliminated, but 
China remains. Possible complications which may be 
injected by Interference of other powers cannot be Ig- 
nored. These considerations impelled Russia to for a 
time adopt a negative attitude, to play a waiting game, 
leaving Initiative to Japan, realizing that International 
attention would for a while be concentrated upon her erst- 
while opponent. 

Russia's post-bellum stock-taking In the East revealed 
this situation: She occupies two-thirds of Manchuria, 
Including the entire northern watershed, embracing the 
region drained by the Sungari and Its tributaries; she 
controls the mighty Amur; she has a fortified seaport 
in Vladivostok, connected with Siberia and European 
Russia by the Manchurian and Siberian railways; her 
hold. In Mongolia is not materially weakened; while be- 
yond and behind it all stands her great Empire, unshaken 
and practically unaffected. This survey revealed no cause 



276 THE FAR EASTERN QUESTION 

for despondency. So Russia quietly and unobtrusively 
took up her eastern policy where the war had left It, tak- 
ing note of changes and new factors, and prepared to play 
her remaining cards for all they are worth. 

Russia's position In Manchuria Is defined by the Ports- 
mouth treaty and, In an International sense. Is Identical 
with Japan's. It Is apparent that Russia felt that the 
burden of proof of the bona fides of the Portsmouth 
treaty. In respect to Its declarations about Manchuria, 
rested with Japan, so during the evacuation period the 
Russians seem to have watched the Japanese and followed 
their lead In political matters. As the Japanese armies 
were withdrawn, so also, In about the same ratio, were 
the Russian armies removed from China's provinces. But 
Russia has eastern possessions of her own, which permits 
her to retain a considerable number of troops there without 
being questioned. The garrisons at Vladivostok, Khaba- 
rosk and In the Baikal region constitute at least two army 
corps, while Russian " railway guards " In northern Man- 
churia balance those of Japan In the south. During this 
Interval the attitude of Russia toward China was concilia- 
tory, while China was not disposed to press Russia or 
force an Issue in the north, since both seem to have felt 
that the Japanese sphere will provide the real test. 

In one Important matter, however, Russia's post-bel- 
lum policy in Manchuria differed from that of Japan. 
This is in commercial affairs. The Russians never have 
pursued a niggardly policy in regard to the trade of other 
nations In Manchuria. On the contrary, during the Rus- 
sian regime before the war foreign trade In the country 
greatly Increased, especially that of the United States, 
owing to the fact that a condition of comparative order 
prevailed, and that the Russians interposed no obstacles 
to commerce. The present industrial situation of Russia 



RUSSIA IN EASTERN ASIA 277 

does not require special exploitation In her favor of 
far eastern markets. Under the WItte regime, Russia's 
eastern policy was called commercial as distinguished from 
political; but it nevertheless was entirely political in its 
main objects, and an impartial attitude in commercial 
matters merely was a means to content other nations with 
Russia's occupation of the country. Russia was looking 
far into the future, and was for the time quite willing 
to witness an expansion of trade there, especially since 
she had no immediate need commercially to exploit Man- 
churia for herself. 

After the war Russia resumed this policy, which was 
more sharply thrown Into relief because of Japan's oppo- 
site attitude in the south. Russia made no attempt to 
prevent foreigners from entering the country after peace 
was established. Instead of interposing obstacles to the 
importation of products, as Japan did in her sphere, Rus- 
sian officials smoothed their way by providing routes 
of access. In pursuing this policy Russia apparently was 
Influenced by several motives : supplies were required for 
the Russian troops, and could be more cheaply and quickly 
got In from China than from Europe; Russia had no 
products of her own which she wanted to dump into 
Manchuria; she saw an opportunity to make Vladivostok 
a port of entry for Manchuria by taking advantage of 
the closure of ports of Ingress in the south to all except 
Japanese products; and It placed Japan In a somewhat 
embarrassing position by contrast. So a service of ships 
plying between Shanghai and Vladivostok was established, 
and through bills of lading were Issued from Shanghai 
to points In Manchuria Inside the Russian sphere, via 
the Russian railway. By this route products could enter 
Manchuria as far south as Kwang-cheng-tze, and could 
reach KIrln. This route was freely used by shippers 



278 JHE FAR EASTERN QUESTION 

during the year which followed the conclusion of peace, 
and still is to some extent; and the fact that foreign trade 
in Manchuria did not show a greater falling off during 
this period Is due to Its existence. I know of several 
Instances when foreigners who, after having been refused 
permission to travel in the Japanese sphere of Manchuria, 
entered through the Russian sphere and thus managed 
to reach at least part of the country. In the Russian 
sphere business revived soon after the war, while normal 
commercial conditions are not yet fully restored In the 
south. 

To understand the questions Involved In Russia's policy 
In northern Manchuria It Is necessary to consider her 
relations with Japan as they have developed since the 
war. The Portsmouth treaty left many matters to be 
adjusted subsequently, among which was the exact status 
of the Russian and Japanese railways in Manchuria. The 
articles of the treaty concerning railways follow: 

Article VI — The Imperial Russian Government en- 
gage to transfer and assign to the Imperial Government 
of Japan, without compensation and with the consent of 
the Chinese Government, the railway between Chang-chun 
(Kwang-cheng-tze) and Port Arthur and all Its branches, 
together with all rights, privileges and properties apper- 
taining thereto in that region, as well as coal mines In the 
said region belonging to or worked for the benefit of the 
railway. 

Article VII — Japan and Russia engage to exploit their 
respective railways In Manchuria exclusively for commer- 
cial and Industrial purposes and in no wise for strategic 
purposes. It is understood that this restriction does not 
apply to the railway in the territory affected by the lease 
of the Llao-tung peninsula. 



RUSSIA IN EASTERN ASIA 279 

Article VIII. — The Imperial Governments of Japan 
and Russia, with a view to promote and facilitate inter- 
course and traffic, will, as soon as possible, conclude a 
separate convention for the regulation of their connecting 
railway service in Manchuria. 

When the Russian army retreated from Moukden it 
destroyed the railway for some distance north of Kwang- 
cheng-tze, and when operation was resumed a gap of 
about forty li remained between the southern end of that 
part of the Chinese Eastern Railway which Russia re- 
tained and that part which she ceded to Japan; a condi- 
tion detrimental to the Japanese line because it left it 
without connection with the north. As time passed the 
Russians showed no disposition to establish a connection, 
although repeatedly urged to do so by the Japanese. 
Finally, on June 13, 1907, a convention relating to Jap- 
anese and Russian railway operation in Manchuria was 
signed at St. Petersburg in pursuance of Article VIII of 
the Portsmouth treaty. It stipulates that the actual junc- 
tion will be at Kwang-cheng-tze, but the exclusive admin- 
istration of this place is relinquished by Japan to Russia 
for a money consideration. The convention provides for 
installation, under regulations subsequently to be adopted, 
of a connecting train schedule, and for the transfer of 
freight at the point of junction. The question of the 
construction of a branch to Kirin, which inheres to the 
Russo-Chinese Bank under the original agreement, appar- 
ently is left in abeyance, although Japan tentatively agrees 
not to interpose obstacles to this project. 

A few days after this railway convention was signed, 
a general agreement ^ defining the relations of the two na- 

1 Appendix C. 



28o THE FAR EASTERN QUESTION 

tions was reached. It was signed on July 30, 1907, at 
St. Petersburg, and is here given in full: 

" The Government of his Majesty the Emperor of 
Japan and the Government of his Majesty the Emperor 
of All the Russias, desiring to consolidate the relations of 
peace and good neighborhood which have happily been re- 
established between Japan and Russia, and wishing to 
remove for the future every cause of misunderstanding 
in the relations of the two Empires, have agreed to the 
following arrangements : 

Article I. — Each of the high contracting parties en- 
gages to respect the actual territorial Integrity of the 
other, and all the rights accruing, to one and the other 
party from treaties, conventions and contracts In force 
between them and China, copies of which have been ex- 
changed between the contracting parties (in so far as 
these rights are not Incompatible with the principle of 
equal opportunity), of the treaty signed at Portsmouth 
on August 23, 1905, as well as the special conventions con- 
cluded between Japan and Russia. 

Article II. — The two high contracting parties recog- 
nize the Independence and the territorial integrity of the 
Empire of China and the principle of equal opportun- 
ity in whatever concerns the commerce and Industry of 
all nations In that empire, and engage to sustain and de- 
fend the maintenance of the status quo and respect for 
this principle by all the pacific means within their reach. 

In witness whereof, etc." 

This agreement may mean a good deal or nothing. 
The reason for its promulgation at this time Is not obvious, 
unless It was because Russia and Japan felt that the world 
was becoming uneasy concerning their continued occupa- 



RUSSIA IN EASTERN ASIA 281 

tion of Manchuria, and they thought it wise to reiterate 
allegiance to the " open door " and the territorial in- 
tegrity of China. In view of the fact that only these 
powers are at present actively encroaching upon China's 
territorial integrity and administrative autonomy, and only 
Japan is now disposed to trample the " open door " prin- 
ciple under foot, this pronouncement has a humorous side. 
Russia and Japan mutually engage to " sustain and de- 
fend the status quo." Does this mean the existing status 
quo in Manchuria? Article I binds the two nations to 
respect all rights which either has under treaties and 
agreements with China, and mentions that copies of all 
such agreements are thereby mutually exchanged. One 
wonders If this means that Japan then provided Russia 
with the alleged secret clause of the Komura — Yuan 
agreement under which she now objects to extension of 
Chinese railways In Manchuria, and if Russia responded 
by confiding to Japan her interpretation of the disputed 
clause In the Chinese Eastern Railway concession, on 
which Russia and Japan now base their alleged right to 
exclusive administration of settlements along the right 
of way of this line. Unless something of this kind 
was In the minds of the plenipotentiaries, the convention 
seems to be only an Inane repetition of previous utter- 
ances of both governments, and Is Incapable of being 
practically construed. Analyzed In the light of actual 
conditions, it justifies suspicion that It really amounts to 
a mutual agreement by Russia and Japan to hold fast 
what they have got; or rather, that neither will disturb 
the other, provided other Interested nations remain quies- 
cent. 

Of elements which will play an important part In de- 
termining the future of Manchuria, none Is of greater In- 
terest and importance, from an Internationl viewpoint, 



282 THE FAR EASTERN QUESTION 

than the railway situation. Railways were made the ex- 
cuse for foreign occupation of the country in the begin- 
ning, and they are still used to continue it. They provide 
a means to evade, by practices which are dif&cult to 
trace definitely, the principle of equal commercial oppor- 
tunity, and to undermine China's sovereignty. Soon after 
the last agreement with Japan was promulgated, Russian 
policy in northern Manchuria abandoned its passive atti- 
tude and began to reveal aggressive qualities. What Is 
now known as the " Harbin incident," by which Russia 
attempted to establish administrative authority over the 
entire city, and which brought her Into contact with the 
United States, was an. Important manifestation of the 
change. One cannot doubt that this contention of Russia 
was advanced with the approval of Japan, since the prin- 
ciple Involved applies also In Japan's sphere. It is prob- 
able that a point Inside the Russian sphere was selected 
for a test because the original agreement was with Russia 
(through the Russo-Chinese Bank), and Russia Is pre- 
sumed to be familiar with circumstances surrounding 
negotiation of the concession, and which must Influence 
constructions now placed upon It. The diplomatic Issue 
raised by this Incident has been reviewed In connection 
with discussion of conditions In the Japanese sphere. 
That Japan is prepared to approve of Russia's Interpreta- 
tion of the Chinese Eastern Railway agreement is Intimated 
by the attitude of the Japanese official press toward the 
position assumed by China and the United States. 

In addition to a direct interest In the question of rail- 
way administration, Japan Is anxious to secure the assent 
of Russia to her attitude In the Fakumen railway matter. 
On this point, however, Russia now seems disposed to 
adopt a neutral position, so that she may, If It should be 
to her advantage, trade either with China or Japan In 




Russian Outpost in ^Iongolia. 




Russian Outpost in Mongolia. 



RUSSIA IN EASTERN ASIA 283 

establishing the conditions under which railway develop- 
ment in Manchuria will proceed. China's desires are 
well known. She wishes to extend the Imperial Railways 
of North China in two directions; from Tsinmintun north- 
ward, via Faku-men and Tsitsihar, to the Amur opposite 
Blagovestchenk, intersecting the Russian railway west of 
Harbin; and also from Kalgan to a point on the Siberian 
railway somewhere between Lake Baikal and Khallar. A 
route from Khailar to Kalgan was surveyed several years 
ago, and Russia Is disposed to claim that the right to 
build this line was promised to her. If so, it is not 
recorded In any published agreement; although there Is 
little doubt that, had not war with Japan halted Russia's 
eastern policy, she would have compelled China to grant 
a concession for a railway across Mongolia either from 
Urga or Khallar. Such a road will reduce the time 
from Peking to Moscow by three days. Its construction 
will eflfectlvely eliminate the South Manchurlan Railway 
as a factor In competing for travel between Europe and 
the Far East, which Japan recognizes. 

The situation thus Is a triangular one, and contains 
some Interesting possibilities. Russia is in a better posi- 
tion than Japan, since her Siberian and Trans-Caspian 
railways are Indispensable as links In any route between 
Asia and Europe. She can reach an agreement with 
Japan by which the two nations will obstruct Chinese rail- 
way construction In the north and retain that territory 
for themselves ; or she can make an agreement with China 
by which Japan will be left on the outside, with no 
through connections. A glance at a map shows that 
Russia really possesses the key to the situation, so far as 
these three nations are concerned. She may take China's 
side to the extent of consenting to the extension of the 
Imperial Railways of North China to the Amur, pro^ 



284 THE FAR EASTERN QUESTION 

vided China gives Russia the right to connect Kalgan with 
Urga or Khailar, and a further concession across Mongo- 
ha east and west from Kokand. These circumstances 
caused great interest throughout the East in the visit in 
1908 of Baron Goto, president of the South Manchurian 
Railway, to St. Petersburg. His visit ostensibly was to 
arrange details for the final connection (there still was a 
small gap between them) and operation of the Russian 
and Japanese lines in Manchuria; but it was reported that 
he carried an offer from the Japanese Government to pur- 
chase from Russia that part of the Chinese Eastern Rail- 
way between Kwang-cheng-tze and Harbin, and that he 
proposed other arangements designed to prevent Russia 
from treating with China. The result of Baron Goto's 
visit to the capital of the Tsar is not yet definitely known. 
Russia shows no inclination to be drawn hastily into any 
arrangement, and seems to prefer to keep Japan and 
China on the anxious seat for a while. It is not apparent 
what Japan has to offer Russia, as a quid pro quo, for 
her support in this matter; for anything that Japan now 
is likely to give may be had by Russia without her consent. 
Then Russia has been in the game of eastern politics 
too long not to realize that external factors may be in- 
jected into this question of railway development in the 
Chinese Empire. Other powerful nations, notably the 
United States, Great Britain and Germany, are deeply 
Interested In the matter; the United States not, however, 
as a possible owner and operator, but as a shipper. It 
is possible for an International situation to arise which 
will place limitations upon the actions of Russia and 
Japan In the north. Having this possibility in mind, 
Russia Is considering schemes to protect her position In 
the east in any eventuality. In time, if the Chinese Em- 
pire endures, the Russian and Japanese railways in Man- 



RUSSIA IN EASTERN ASIA 285 

churia will become the property of China, by purchase 
under the terms of existing conventions, which would 
leave Vladivostok and the Ussuri littoral, which now is a 
thriving Russian colony, isolated. Undoubtedly it is con- 
templation of this condition that induces the Russian 
Government to push its plans for the Amur Railway, and 
the grant by the Duma of the preliminary funds required 
to begin this project intimates that Russia has no intention 
to abandon her position in the East. 

It is believed that China also has proposed to purchase 
Russia's interest (it should be remembered that China 
has an Interest in this railway) in the Chinese Eastern Rail- 
way between Harbin and Kwang-cheng-tze ; and also to 
purchase the east and west line. If the treaties con- 
cerning these lines in Manchuria are not broken by Japan 
and Russia, or replaced by new treaties, the roads will 
in time revert to the control of China. Neither Rus- 
sia nor Japan desires this, and It safely may be as- 
sumed that they will prevent it if possible, but both gov- 
ernments must now consider the possibility that events 
will so shape themselves that they will be compelled to 
fulfill their agreements. So Russia may consider it ad- 
vantageous to her to lean toward China in this matter of 
railways, and may prefer to dispose of any interests which 
she now cares to relinquish to the proper legatee. China 
may strenuously object to a sale of the northern part of the 
Chinese Eastern Railway to Japan, as China's right to an 
option on It cannot justly be disputed. 

Political conditions in the Russian sphere of Manchuria 
are very similar to those In the south. Chinese autonomy 
ostensibly has been restored except in the railway settle- 
ments, over which the Russians assert authority. The 
refusal of the United States consul at Harbin to recognize 
the Russian administration, and the support by the United 



286 THE FAR EASTERN QUESTION 

States of China's position which was a result, had the 
immediate effect of leaving Harbin and other towns prac- 
tically without government worthy of the name. Harbin 
is typical of Russian administration in Manchuria to-day. 
This young city on the Sungari is indeed an extraordinary 
place. There really is no municipal government. Busi- 
ness is stagnant, yet the place throbs with life of a sort. 
Cafes and dance halls are open day and night, and are 
the reso'rt of persons of all classes. At night the streets 
are poorly lighted. Murders and robberies are frequent; 
It is asserted that a federation of police, cabmen and pros- 
titutes conspires to fleece such victims as may offer. One 
is warned not to leave the hotel at night, or to go about 
alone, and especially not to confide in strangers. Everyone 
complains of hard times, yet the cafes are full of revelers, 
who applaud the singers and apparently consume great 
quantities of champagne. Where the r.ioney comes from 
no one seems to know. Those who are not supported 
by the Government live off the railway administration. 
Places like Khailar, Manchuli and lesser towns on the 
railway reflect Harbin on a smaller scale. The lax con- 
ditions have attracted a large proportion of foreign 
riff-raff in the East, an element which the Russian admin- 
istration makes no effort to keep in, hand, while the author- 
ity of Chinese officials is ignored. 

Chinese custom houses recently were established on 
the Manchurian land frontier, where the maritime import 
duty is collected on products entering from Siberia. These 
chiefly are farm and dairy products. The railways are 
policed by Russian " guards," and there are small Russian 
garrisons at Tsltslhar, Mongar, Aigun, Sangsan and some 
other towns outside of the railway zone. Russian troops 
are stationed at Urga and several places in northern Mon- 
golia. Russia's hand covers the north as completely as 



RUSSIA IN EASTERN ASIA 287 

does that of Japan in the south, but her grip is not so 
tight. 

If other evidence that Russia intends vigorously to 
push her interests in eastern Asia was lacking, that af- 
forded by the Russian immigration to eastern Siberia 
would be conclusive. Within the past two years one of 
the greatest human migrations of modern times has been 
proceeding so quietly that It has hardly been noticed. 
Official statistics of the Russian Government show that 
In 1906, the first year after the war, this immigration was 
180,000; in 1907 It was over 400,000; and for the first 
half of 1908 It exceeded 500,000. This remarkable 
movement is influenced by several causes, of which the 
glowing reports of soldiers who served In the Far East 
of the fertility of that region and the agrarian depression 
in European Russia are probably the more potent; but It 
could not have obtained Its present momentum without 
direct encouragement and support of the Russian Govern- 
ment. These immigrants are chiefly settling in the Ussurl 
littoral and along the Amur, a country which will. In the 
course of a few years, be made more accessible by com- 
pletion of the proposed Amur railway. Russian news- 
papers have stated that the Government will actively en- 
courage this migration until at least 5,000,000 Russians 
are settled In the, Far East. If this comes about, as It 
easily may, and the Siberian railway is double-tracked, 
Russia will become so entrenched in the East that her 
position there cannot be shaken. Russia may never again 
be so amenable to external influence In the shaping of her 
eastern policy as she now is ; a matter to be considered by 
other Interested governments. 

In considering Russia's probable attitude toward the 
fundamental issues of the Far Eastern Question — the 
" open door " and the integrity of China — some phases 



288 THE FAR EASTERN QUESTION 

shape themselves quite clearly. While she appears, for 
the moment, to be disposed to reach a compromise with 
Japan to the extent of agreeing to maintain the status quo 
in Manchuria, it is dijfi&cult to understand how the ambi- 
tions of these nations in eastern Asia can be made per- 
manently to harmonize. There is not room for both of 
them to fully develop, for, while they are similar in the 
sense that each has the same general object, they are an- 
tagonistic in that both desire the same prize. A greater 
Japan will mean the knell of Russia's eastern policy; a 
greater Russia in the East may make impossible Japan's 
eventual supremacy there. 

Between the two lies China, and a greater China will 
solve the question herself by maintaining international equi- 
librium in the Far East. If Japan retains her hold in 
Manchuria it is certain that Russia will not relax hers; 
to this extent will Russia assent, for the present, to Japan's 
designs. International interest now attached to Rus- 
sia's attitude is in conjecturing, if pressure is brought upon 
Japan, by a single great power or by a combination of 
powers, to compel actual evacuation of Manchuria and 
real restoration of China's autonomy there, which side Rus- 
sia will take. As to this, one cannot positively know, 
but there seems little reason to doubt that under such cir- 
cumstances Russia will find it to her advantage to fall 
Into line with other western powers. In opposing the 
maintenance of China's integrity and the " open door " 
Russia Is now merely passive; she will not openly affront 
public opinion in America, England and Europe If It is ral- 
lied to the rescue of these principles. This gives assurance 
that to Induce Japan and Russia to fulfill their obligations 
in the north will not be so difficult as some students of 
eastern affairs believe, and Interference by other nations 
with this object does not necessarily carry with it a prob- 
ability of war. 



CHAPTER XXII 

THE REFORM MOVEMENT IN CHINA 

Real Struggle for Reform Begun — Fight Between 
Conservative and Progressive Elements — Bases for Prac- 
tical Reform — The Chinese Government Analyzed — 
The Court — Not Opposed to Moderate Reform — The 
Empress Dowager — The Metropolitan Administration 
— Provincial and Local Administrations — Various 
Branches Interdependent — The Reform Issues — Extra- 
territoriality — The Foreign Settlements — The " Right 
OF Recovery " Doctrine — Popular Vitality of the Re- 
form Movement. 

Speaking several years ago of the political situation 
of China, an eminent Chinese said to me : 

"There are two possible futures for our nation; a 
reorganization of its administration on modern lines, or 
disintegration and a final lapse into complete foreign dom- 
ination. China rapidly is nearing a parting of the ways, 
and she must choose her course while she may be permitted 
to choose." 

The fight between the conservative and progressive 
elements, the clash of old and new ideas which this utter- 
ance foretold Is now in full swing. Internal forces which 
may destroy or regenerate the Empire are assuming definite 
shapes, are formulating policies and groups. For many 
years China has been playing at reform; her serious 
struggle with It has at last begun. 

Practical reform must In China, as elsewhere, shape 
itself out of materials already to hand, and this means 

289 



290 THE FAR EASTERN QUESTION 

modification of existing conditions and governmental 
forms. The Chinese Government has been for centuries 
and is to-day divided into four major segments : the Court, 
the metropolitan, provincial and local administrations. 
The Court is composed of the Emperor, the Imperial 
Household and the Manchu nobility. Theoretically, the 
Emperor is the source of all authority, but his actual power 
is circumscribed by laws and customs of the Empire, which 
he no more may seriously Infract than may the King of 
England override the unwritten British constitution. The 
power of the Court In directing affairs of the Empire de- 
pends upon the personality of the Emperor, or that of 
some other member of the Imperial family. The Em- 
peror Kuang Hsu was weak, and during the greater part 
of his reign the Court was dominated by the Empress 
Dowager, who exerted Influence by exercise of stronger 
Intellect and will rather than by possession of actual au- 
thority. Etiquette requires the Emperor to remain se- 
cluded, and he rarely goes among his subjects, so he Is 
GQmpelled to depend upon his councillors for Information 
about political affairs; which Induces a constant struggle 
among councillors and Court cabals to gain the ear of the 
Emperor or of that member of the Imperial family who 
for the moment dominates the Court. A strong Emperor 
may have great influence upon policies, but a weak one Is 
supine In the hands of Court Intriguers and clever minis- 
ters, and In the past frequently has had only a vague con- 
ception of Imperial affairs. 

Closely allied to the Court, Influencing It or being In- 
fluenced by It, as the case may be, Is the metropolitan 
administration. In former times the province of the met- 
ropolitan administration was to criticize rather than to 
direct the provincial governments, but development of 
foreign relations of the Empire and necessity for national 



THE REFORM MOVEMENT IN CHINA 291 

action and direction of certain affairs has caused, during 
the last fifty years, a gradual extension of the central 
authority and the assumption by it of many functions 
formerly exercised by provincial officials. The develop- 
ment of transportation and communication facihtles has 
tended to strengthen the grip of the Imperial Govern- 
ment upon internal affairs. Where it formerly took weeks 
for Peking to communicate with remote provinces, it may 
now be done by telegraph in a few hours. Journeys 
which formerly required months to complete may now be 
made, by ship and rail, in as many days; so officials can 
quickly be instructed, or summoned to Peking for consul- 
tation and admonition. It also is now possible quickly 
to dispatch troops to most of the provinces, which makes 
provincial officials more amenable to the authority of the 
central Government. In recent years it has become rec- 
ognized by intelligent men throughout the empire that 
broader affairs of the nation cannot always be handled 
in conformity with provincial views and interests. The 
metropolitan administration includes the Grand Secretariat, 
Grand Council, and the nine boards, which may be com- 
pared to the Cabinet and executive departments In the 
United States, and which perform similar general func- 
tions. 

Provincial administrations, and the local administra- 
tions under them, may be compared to States, counties, 
and townships in America. But provincial governments 
in China have exercised and still possess powers which 
never were conceded to our States. They levy and 
collect all taxes, except maritime customs, remitting a pro- 
portion to the Imperial Government; they have until re- 
cently maintained Independent military organizations; 
they formerly conducted their own foreign affairs; they 
have had exclusive control until very recently of their 



292 THE FAR EASTERN QUESTION 

own currency. It may be said that the Empire was 
once composed of great semi-Independent principaHties 
comparable to the feudal system in Europe, and the Daimo 
regime In Japan. There always has been, however, this 
Important modification: there is no stability of official 
tenure, such as was provided by a hereditary aristocracy 
In Europe and Japan. The hold of the central over the 
provincial governments, and the protection of the various 
provinces against aggressions of the others, has chiefly 
depended upon the authority of the metropolitan admin- 
istration to appoint all provincial officials, the practice of 
never appointing an official to a post In his native province, 
and the frequent transfer of officials from-, the metrop.QL- 
Itan to the provincial governments, and vice yersa. Thus 
are the two administrations made largely Interdependent, 
and development of excessive power by either Is prevented 
by making each a check upon the other. 

This brief and necessarily Imperfect summary of the 
political Institutions of China may help tO' an understand- 
ing and estimation of elements which Impel and direct 
the_refDrm nioyement. Such movements, to be success- 
ful, must have a sentimental slogan; and here this slogan 
Is "China for the Chinese." This fundamental idea runs 
through all phases of the movement, and provides the 
basic doctrine for all political groups, although variously 
expressed. Put more specifically. It finds expression In 
the so-called " right of recovery " policy. This policy 
takes numerous forms, but all turn upon the following 
propositions : 

yi. The abolition of extra-terrltorlality. 
^2. Restoration of the fiscal autonomy of the Empire. 
. .3. Abolition of residential districts, or " concessions," 



THE REFORM MOVEMENT IN CHINA 293 

within the Empire which are under the administration of 
foreigners and outside the full jurisdiction of China. 
U4. Recovery by Chinese of ownership and management 
of concessions to foreign governments, and corporations 
which mask governments, such as mining rights and rail- 
ways, and leased territory. 

The relations of China to other nations, as expressed 
in treaties with them, have not materially changed since 
these treaties first were ratified. Most of them date back 
fifty or more yearS;, and were negotiated at a time when 
the Chinese Government was unfamiliar with interna- 
tional relations, and of the forms which circumscribe 
them. Consequently, its commissioners were reduced to ac- 
cept conditions to which no nation would think of consent- 
ing to-day. Intelligent Chinese now contend that foreign 
nations took advantage of China's ignorance to impose 
improper and unjust conditions upon her, but this is dis- 
puted. At the time these treaties were negotiated the sit- 
uation was extraordinary, and while foreign nations pressed 
their advantage as far as was possible, most of their pro- 
visions may be regarded as fairly sensible measures, from 
a foreign standpoint, as conditions were then. While 
these treaties vary in minor clauses, all contain a condi- 
tion which is the cause of great present dissatisfaction to 
Chinese. 

This is called " extra-territoriality," and means that 
China conditionally has abdicated sovereignty over por- 
tions of her territory, and also over foreigners who reside 
within the limits of her domain. This condition, which 
is irreconcilable with real national autonomy and incon- 
sistent with wholesome national pride, cannot be regarded 
by Chinese except as an anomaly, and only temporarily 



294 THE FAR EASTERN QUESTION 

tolerable. Yet it should not be wholly condemned with- 
out explanation of reasons which caused its adoption, and 
examination of its results. When foreigners first came 
to live in China, Chinese jurisprudence was (and still is 
from a western viewpoint) in a semi-chaotic state, and its 
code of punishments antiquated and barbaric. As trade 
with other countries grew and it became necessary for 
foreigners to reside in Chinese cities to facilitate business, 
it was recognized that the humanitarian spirit of western 
civilization could not tolerate the idea of submitting them 
to the jurisdiction of Chinese courts, especially In cases 
where punishment must be Inflicted. In civil litigation, 
also, It was thought that Chinese jurisprudence was too 
complicated and Its judiciary too corrupt, as the West 
understands corruption, to be a satisfactory resort for 
adjudication of International business disputes, or questions 
of personal liberty. 

It Is probable that when the treaties were negotiated 
the Chinese Government felt relieved at not having to 
bother with legal rights of foreigners In China. For- 
eign residents then were few, and some developments of 
recent years were not anticipated. So sovereignty over 
them was willingly surrendered to their own governments, 
and settlements designated, adjacent to the principal treaty 
ports, where they might. In a way, govern themselves. 
It may be recalled, In this connection, that similar condi- 
tions formerly existed In Japan. But as time passed, and 
the foreign settlements assumed important proportions. 
Indeed became the chief marts of the Empire, various 
anomalies developed. 

In Illustrating some of these conditions. It Is well to 
take the foreign settlements at Shanghai, for they are the 
larger and more Important, and have developed greater 
complexities and more Irritating points of friction. The 



THE REFORM MOVEMENT IN CHINA 295 

creation of treaty ports to a great extent concentrated 
business at those places, and attracted a large Chinese 
population, who came to live in the foreign settlements. 
This condition caused a question of jurisdiction over 
these Chinese. China, naturally, assumed that she still 
exercised jurisdiction over her own subjects in their own 
country; but this was disputed by the foreigners, who 
claimed full jurisdiction over the settlements, which 
necessarily meant jurisdiction over all who resided in 
them. The foreigners pointed out that control over the 
settlements was necessary to insure sanitary precautions, 
adequate police protection and substantial justice to Chi- 
nese and foreigner alike. In these contentions they were 
supported by their governments, and China compromised 
by partially yielding. It Is now evident that, In accept- 
ing this condition, the Chinese Government did not fully 
realize what it was doing, or the consequences of its act. 

It was agreed that foreigners should remain under the 
jurisdiction of their several consular representatives in 
most matters, and a Mixed Court was created to have 
partial jurisdiction over Chinese residing In the foreign 
settlements. For instance : in an issue between an Amer- 
ican individual or corporation and a Chinese, If the Amer- 
ican Is defendant the matter will come before the American 
authorities, and be tried under American law; if the Chi- 
nese is defendant the matter comes before the Mixed 
Court, and is judged by Chinese law, or the municipal 
ordinances. Matters In which only Chinese are Involved 
are tried by the Mixed Court. This Court is a peculiar 
institution. It Is composed of two Chinese magistrates, 
and one assessor. The assessor is a foreigner, who, by 
gradual perversion of the probable Intent of the treaties, 
now exercises power to veto a decision of the mag- 
istrates by refusing assent to their verdict. For exam- 



296 THE FAR EASTERN QUESTION 

pie, if the magistrates find a Chinese guilty of some 
crime and assess his punishment, the decision cannot 
be carried into effect without assent of the assessor. 
This is done, as foreigners put it, "to secure justice"; 
which hardly is a valid reason, ethically, since if a court 
Is created and given certain jurisdiction it should be as- 
sumed that it will do substantial justice. Many foreign 
lawyers who have studied the working of Chinese jur- 
isprudence hold the opinion that very substantial justice 
usually is done. If this was not true, Chinese would 
long ago have overturned their Government. But Chi- 
nese, and western ideas of justice differ, and the Mixed 
Court evidently aims to strilce an average. There is no 
valid reason why a foreigner should not sit upon a 
court where foreign interests are adjudicated, in a coun- 
try where extra-territoriality obtains, but the validity 
of foreigners interfering with purely Chinese justice has 
been questioned. Here is a delicate matter, and while 
the logic of the situation clearly Is against the foreign 
contention, peculiar circumstances give the matter a some- 
what different aspect. Many Chinese punishments are 
intolerable to the western mind, and foreigners in China 
hold that they should and do have the moral right to 
prevent such punishments from being Inflicted even upon 
Chinese within limits of the foreign settlements. So, If 
a Chinese magistrate imposes what the assessor considers 
a too severe sentence, or an unequitable decision, the as- 
sessor will. advise its modification. 

It will easily be seen that this system produces innumer- 
able opportunities for friction. Yet there is little friction, 
as a rule, between magistrates and assessors, w^ho In most 
cases work amicably together, advising with each other, 
and making mutual compromises, not very differently 
from the method of reaching decisions in western courts 




u 



u 



i 



THE REFORM MOVEMENT IN CHINA 297 

where more than one judge sits. And, rather strangely, 
it appears that foreign assessors intervene more often 
to secure severer punishments, than they do on the side 
of leniency. Taken as a whole, It seems that the Mixed 
Court dispenses substantial justice, notwithstanding its 
obvious incongruities. The relation which the Mixed 
Court bears to jurisprudence in the foreign settlements at 
Shanghai will be appreciated when I say that the foreign 
population of the settlements is about 15,000 and the 
Chinese population two-thirds of a million. These are 
in addition to residents of the Chinese city, Immediately 
adjoining the foreign settlements, which has a population 
of half a million more. Chinese law prevails in the 
Chinese city. It is, perhaps, significant that since the 
founding of foreign settlements the Chinese city of 
Shanghai has not materially Increased In size, while the 
settlements have grown as indicated. It thus seems that 
many Chinese prefer the government of foreigners to their 
own. But anomalies growing out of extra-territoriallty 
have, at times, led to serious disturbances ; and if there is 
to-day any universal sentiment among Chinese it is that in 
the future, If China remains a nation, foreigners must take 
a. similar position there as they now occupy in Japan and 
other countries. 

Desire to recover full control of the Empire's fiscal 
affairs, and of railways and mining concessions. Is due 
to realization that such enterprises have been In the past 
and are now used by some nations as means to advance 
foreign political Interests and designs In China, and fur- 
ther to cripple and infringe upon the Empire's autonomy. 
Indeed, it may be said that the reform movement has its 
origin in fear; a fear that unless the Empire gets Into 
step with modern progress It eventually will cease to be a 
nation. It is recognized even In China that abolition 



298 THE FAR EASTERN QUESTION 

of_. extra-territoriality must wait upon actual accom- 
plishment of reform, but the recovery of other concessions 
has_already begun. It__is possible to cancel any or all 
of these concessions for a consideration, and this has 
recently been done with two important ones, the Canton — 
Hankow railway and the Peking Syndicate. It is signifi- 
cant, however, that the two concessions thus recovered 
are ones from which political peril was least to be appre- 
hended. Furtherance of this policy depends upon exten- 
sion of internal reforms, and this gives to the reform 
movement genuine popular vitality. 

While its preliminary mutterings were heard before, 
this movement is a growth of the last decade; and even 
in this brief period it has assumed two distinct phases, 
which may be differentiated as theoretical and practical. 
As a rule governments are nagged into instituting reforms, 
and China Is no exception. In her case the hecklers are the 
foreign powers, whose nagging is expressed In the usages 
and Insistent demands of modern western civilization and 
progress. Her humiliating defeat by Japan, in 1894, 
jarred China's rulers Into partial awakening. Among 
those who listened to the message of those events was Em- 
peror Kuang Hsu, then twenty-five years old. His Maj- 
esty was becoming impatient under the restraint Imposed 
upon him by the Empress Dowager, who had, as regent 
during his long minority, ruled the Court with a strong 
hand, and who then was opposed to the adoption of western 
methods. Unfortunately, Kuang Hsu did not possess the 
qualities of mind and will which the occasion demanded. 
In his enthusiasm he took as advisers a number of so-called 
" advanced reformers," Chinese who had superficial knowl- 
edge of western Institutions, but whose ideas about apply- 
ing them to China were Impractical at that time. Under 
this influence the Emperor disregarded the advice of elder 



THE REFORM MOVEMENT IN CHINA 299 

and jTipre conservative councillors, such as LI Hung Chang 
and Prince Ch'Ing, and plunged Into an ill-considered and 
almost revolutionary, as political China then was con- 
stituted, programme. Kuang Hsu's intentions were good, 
and undoubtedly inspired by patriotism, and a stronger 
man might have carried them through to at least moderate 
success. But he was unable to do so. The Empress 
Dowager resumed the reins of power, and those of Kuang 
Hsu's reform advisers who did not flee the country were 
Imprisoned or executed, or If their rank was too high 
for this summary method they were sent Into retirement. 
The group of Chinese officials who realized that reform 
was necessary and must come, but who, as practical ad- 
ministrators, knew the futility of making haste too 
rapidly, acquiesced In resumption of power by the Empress 
Dowager, recognizing that she was the only legitimate 
influence through which the Emperor could be controlled. 
LI Hung Chang sided with the Empress Dowager; and 
his principal lieutenant. Yuan Shih-k'al, placed the Em- 
press Dowager under lasting obligation by his assistance 
at the critical moment, and thus laid the foundation for 
his subsequent influence at Court. This Is the sequence 
of events which culminated In what Is known as the coup 
d'etat of 1898. From then until his death Kuang Hsu 
was a broken and spiritless man, and of slight in- 
fluence In the Government. He became afflicted with 
melanchoha, which is said to have undermined his health 
and mind. Yet history may credit him with having in- 
augurated reform In China, for out of his abortive attempt 
a practical phase of reform sprung. 

What might have been the fate of reform in China 
had the Influence of the Empress Dowager, which was 
undoubtedly malign In its relation to this movement, been 
permitted to pursue its normal course may only be con- 



300 THE FAR EASTERN QUESTION 

jectured, and is of minor interest now, for it was not 
destined to dominate. Greater forces were at work. 
The heckling continued, became steadily more insistent 
and urgent. China had been caught in the current of 
world progress, and was powerless to resist its influence. 
Anti-foreign sentiment made a final effort which brought 
on the " boxer " disorders. Its failure, the occupation of 
Peking by foreign troops, the flight of the Court to Shensi, 
and a large indemnity were chastening to the reactionary 
spirit, and it never will resume its former aspect. Then 
came the series of foreign encroachments upon China's 
territory, the Russo-Japanese war, and revival of the 
" sphere of influence " doctrine. Chinese statesmen at 
last fully realized that the fate of the Empire hung in the 
balance ; it became a question of whether China would un- 
dertake reform for herself, or become the subject of a for- 
eign-made brand of it, with probability of temporary and 
perhaps permanent loss of autonomy. 

The relation of the Court to the reform movement is 
interesting, but not, I think, so Important as some com- 
mentators seem to beheve. It has been modified since 
1900, even the Empress Dowager having felt the force of 
constant pressure at external influences. It is apparent 
that during the last few years the Court has come to re- 
alize that reform Is Inevitable, and has been concerned 
about It only In so far as It may affect the reigning dynasty. 
Even under the regime which was terminated In November, 
1908, by the double mortality, the Court latterly did not 
oppose reform as such, but only that brand of reform 
which aimed at deposing the Manchus. There is no 
Chinese pretender to the throne. The Ming line prac- 
tically Is extinct, and even leading native revolutionaries 
realize that no living descendant of the Mings is capable 
of bringing China safely through her present crisis. But, 



THE REFORM MOVEMENT IN CHINA 301 

nevertheless, SAti-Manchu sentiment is perennial in some 
parts of China, always may be invoked to support any 
movement which gains popular approval, and, therefore, 
always must be considered. I was informed when last 
in Peking that the attitude of the Empress Dowager under- 
went a radical change within two years which preceded 
her death, or since some results of the Russo-Japanese 
war became appreciated at Peking. Her Majesty seemed 
to have at last come to understand that the real peril 
which threatens China cannot be met with old methods; 
that there is less danger in reforming than in not reform- 
ing. She even was at times solicitous about the reform 
programme, which she showed by favoring the rise of 
Yuan Shih-k'ai and foreign educated Chinese who com- 
posed the group of which he was the leader. In fact, 
there is little doubt that for some time before her death the 
reactionary political potency of the Empress Dowager 
was more imaginary than real, and she did not dare 
squarely to set herself against the progressive element, 
although repeatedly urged to do so by the reactionary 
cabal which has until recently dominated the Court and 
the metropolitan administration, and which has wit enough 
to perceive that real reform means an end to its influ- 
ence. Her Majesty apparently was content with try- 
ing to assure continuance of the Manchu dynasty, and 
to that end she assented to the designation of Prince 
Pu Yi to succeed to the throne, and to his father. Prince 
Ch'un, as regent during the Emperor's mmority. This 
programme once definitely agreed upon by controlling in- 
fluences of the Court and metropolitan -administration, 
which was done some time before Tsi-an's death, probabil- 
ity of dissension in this quarter was removed. 

There remains, however, the anti-Manchu faction, 
which Is presumed to include a majority of Chinese 



302 THE FAR EASTERN QUESTION 

people and officials, and which probably does, so far as 
sentimental feeling is concerned, but this sentiment is so 
circumscribed by circumstances and conditions that it has 
now no practical means of expression. It would prefer 
a Chinese on the throne; but there is none of the Chinese 
royal line who is fitted for the place; thus the sentiment 
is without a focus. In this connection, it may be well to 
glance at component parts of what is broadly denomi- 
nated the reform, mo vemejit^^fpr this has several factions, 
each somewhat antagonistic to the others. 



CHAPTER XXIII 

THE REFORM MOVEMENT IN CHINA — Con- 
cluded 

A Leaderless Movement — Reform Parties and Groups 
— The JCa-ming-tang — Reforms Advocated — Influence 
of the " Students " — The Conservative Reformers — 
Yuan Shih-k'ai — The Proposed Constitution — The 
Kao-lao-hui — Ideals of the Extreme Revolutionists — 
Seeking a Chinese Napoleon — Sporadic Attempts at 
Armed Revolution — The Confucius Group — Course of 
Practical Reform — China's Fiscal Situation — Excel- 
lent Condition of the Empire — The National Debt — 
Fiscal Possibilities — The Spectre of Foreign Interfer- 
ence — Dangers to China's Autonomy — Competent Of- 
ficials Needed — Education of Chinese Abroad — Wan- 
ing OF Japanese Influence — Reform Movement Should 
BE Taken Seriously. 

The reform movement has not at present any recog- 
nized leaders or regular organizations, but it has fallen 
into groups which can be identified. The more influential 
party is the Ka-ming-tang. It includes a major propor- 
tion of enlightened Chinese, the predominating commer- 
cial element, and draws its leaders chiefly from among 
those who were educated abroad. While it advocates 
what are to China advanced ideas, it wishes to accomplish 
reform by peaceful means and without too abruptly up- 
setting the old order. It demands a constitution and an 
assembly, but does not aim at overthrow of the monarchy, 
and is willing that the present dynasty shall continue to 

303 



304 THE FAR EASTERN QUESTION 

reign provided it will not obstruct progress of the empire 
on modern lines. Among specific measures which it urges 
are currency reform, fiscal revision, revision of the legal 
codes and reformation of the judiciary, substitution of a 
salaried civil service for the " squeeze " system, further 
increase and more exact definition of the powers of the cen- 
tral Government, a modern army and navy, a modern ed- 
ucational system, a revision of the industrial system of the 
country and its establishment on a modern basis, creation 
of a complete system of railways throughout the Empire, 
and promotion of a larger Chinese merchant marine. 

While all who associate themselves with the Ka-ming- 
tang or who (as do some high metropolitan officials) in- 
directly encourage it favor in some degree most of the 
reforms here enumerated, there Is great difference of 
opinion as to ways and means. The younger generation 
of reformers, usually called " students," are impatient at 
any delay, and insist that these reforms be undertaken 
at once and simultaneously, while older heads, like Prince 
Ch'ing, Chang Chih-tung and Yuan Shih-k'ai, advocate 
more deliberate procedure. 

Then there is the Kao-lao-hui, or revolutionary party. 
This group advocates armed revolution, deposition of the 
Manchu dynasty, and complete overthrow of the present 
regime. Its leaders principally are Chinese who were 
associated with the unsuccessful attempt at reform 
which preceded the coup d'etat of 1898, and who since 
then have lived in exile. They contend that genuine re- 
form is impossible except by uprooting the old tree and 
planting another In Its stead. This party has drawn to 
it dissatisfied, restless and unruly elements among the 
people, remnants of the Talping rebellion, anarchists and 
nihilists. It also Includes, no doubt, some sincere and 
patriotic men, but these are rather of the visionary type 




Modern Chinese Army Officers. 




The New Chinese Army. Troops Maneuvering. 



THE REFORM MOVEMENT IN CHINA 305 

in politics. Some of these desire to create a republic, 
but more intelligent ones probably know that a republic is 
impossible as China is now constituted, and prefer to 
place a new dynasty on the throne, founded by an Em- 
peror selected from the ablest of the revolutionary 
leaders. In short, the ideal of the Kao-lao-hui is to dis- 
cover a Chinese Napoleon who will regenerate the Em- 
pire and lift it into the front rank of nations. Its 
leaders are agitators rather than reformers, if I may 
make the distinction. Some of them are believed to 
be in the employ of governments which desire the dis- 
ruption of China, and are supplied with funds. They 
have established themselves at places near to China, at 
Hong Kong, Singapore, Saigon, Macao and in Japan, 
where they continue their propaganda, and whence they 
smuggle arms and ammunition into China in preparation 
for a great rebellion. It may be that some of these so- 
called reformers merely are dupes of agencies which seek 
to accomplish the disruption of China, but there is slight 
reason to doubt that others consciously and for selfish 
reasons lend themselves to this work. They come to 
the front on occasions when events bring China into 
the light of international publicity, and news agencies 
controlled by interests unfriendly to China spread their 
views throughout the world. It safely may be asserted, 
however, that the influence of these agitators upon the 
internal affairs of China Is negligible, whatever im- 
pression to the contrary they may be able to make upon 
International opinion. Occasionally they create a tempo- 
rary disturbance, such as the invasion of Yunnan In the 
spring of 1908; but the propaganda and aims of the 
Kao-lao-hui are discountenanced by better classes of Chi- 
nese, and of course also by the Government, which recog- 
nizes the futility of its methods and the sinister motives 



3o6 THE FAR EASTERN QUESTION 

which provide the source of much of its material support. 
It does not appear that the Kao-lao-hui is now strong 
enough to organize a serious and dangerous revolution, 
but its activity keeps the Government uneasy and indi- 
rectly helps more temperate reformers by exciting the 
fears of the Court. 

There is a third group, the so-called Confucius party, 
which clusters about Duke Kung, a lineal descendant of 
Confucius; but its influence hardly is worthy of serious 
consideration. 

For many years — this was an old and established 

hypothesis when I first saw the East, ten years ago it 

was believed by many students of the situation of China 
that a political cataclysm would follow the death of the 
Empress Dowager. This remarkable woman is dead, and 
almost simultaneously the medium through which she is 
popularly supposed to have ruled — the Emperor — also 
expired; a coincidence not usually included in estimating 
the effects of such an event, and which reasonably might 
be presumed to augment its disturbing phases. Yet China 
took her crisis quite calmly, and as yet betrays no inclina- 
tion to indulge in hysterics, thereby confirming the opinion 
of those, of whom I am one, who believe in the funda- 
mental stability of her institutions, and have had confi- 
dence in the ability of her statesmen to cope with a situa- 
tion so absolutely and definitely foreseen. 

It should not be assumed, however, that because China 
thus holds herself in leash in these critical circumstances 
the events of November, 1908, lack importance. On 
the contrary, they are of tremendous significance to the 
entire world. The relation of these events to the future 
of the Empire has not been overestimated; it is only in 
their consequent manifestations that pessimistic predictions 
have so far failed of verification. The fact that the long- 



m 



THE REFORM MOVEMENT IN CHINA 307 

awaited event occurred, and, from a sensational view- 
point, " nothing happened," is as significant as a revolu- 
tion would have been. The demise of the two monarchs 
does indeed mark the beginning of a new era in China. 
It starts the ship of state upon another tack, and in at- 
tempting to calculate what the new course will be it is 
necessary to consider elements which will influence and 
perhaps determine it. 

A powerful factor in China's present situation is pro- 
vided by external influences which bear upon it, which al- 
ready have been referred to. These derive vitality from 
ambitions that are focused upon the fate of the great Em- 
pire, designs which some nations have upon its vast ter- 
ritory and resources, and interests which some other na- 
tions have in preserving its integrity. The essential 
thing which China has to consider is that, in her present 
comparative helplessness, she must strive to create a bal- 
ance of power among these external elements, through 
emphasizing their diversity of interest, which will prevent 
the hostile ones from descending upon her ; and while she 
is in this situation, which it will require years to correct, 
she must take care not to permit a condition within her 
own borders which will invite or may be made an excuse 
for foreign intervention. This spectre of foreign inter- 
ference is the force which welded together, for pro- 
tection of the nation, internal political elements which 
otherwise might have made the occasion of the death of 
the Emperor and Empress Dowager an opportunity to 
try to seize the reigns of power, and to inaugurate a rev- 
olution. Thus, to a certain extent, have ambitions 
which seek advantage through dismemberment of China 
contributed to sustain her stability in an hour of stress. 
Intelligent Chinese realize that serious and disorderly 
dissension among themselves, or among the major seg- 



3o8 THE FAR EASTERN QUESTION 

ments which constitute their Government, will provide 
an opportunity for foreign intervention, and so care has 
been taken to make such an occurrence practically im- 
probable. Thus, to one who understands the real situation 
in China, the pacific nature of the coup d'etat of 1908 is 
in no way surprising. Announcement of preparations 
made by some powers in anticipation of disorder in China, 
and pessimistic views of the situation which emanated 
from those sources as the crisis was- formulating, afforded 
evidence that fears of Chinese statesmen were not imag- 
inary and that their precautions were not without reason. 

When I was in Peking, in the spring of 1908, I learned 
that the nomination of Prince Pu Yi and the regency of 
Prince Ch'un had been decided, and that in anticipation 
of the death of the Emperor, which might occur at any 
time, the new Chinese army (now about 120,000 strong) 
had been disposed with a view to suppression of any at- 
tempt to foment disorder. Troops were distributed 
throughout the provinces where it was thought trouble 
might begin, and several divisions were kept in readiness 
to proceed to points where they might be needed. 
Three divisions were retained in the vicinity of Peking, 
under officers friendly to the progressive element, and the 
garrison of the city was^cioubled. Except in remote local- 
ities, which are subject to frequent disorders of a local 
character, and whence such a movement cannot quickly 
spread, it was not feasible for an insurrectionary move- 
ment to get a start. These dispositions were made under 
the supervision of Yuan Shih-k'ai, who is responsible for 
creation of the new army. 

The long-expected demise of Kuang Hsu was, however, 
given a dramatic turn by the almost simultaneous death of 
the Empress Dowager, a coincidence deemed by some suf- 
ficiently extraordinary to be the basis of a theory that Her 



THE REFORM MOVEMENT IN CHINA 309 

Majesty's end was hastened by Court physicians in the in- 
terest of national or factional polity. Such incidents are 
quite common in the history of Oriental States, and are 
not unknown in China. It frequently has been quietly 
asserted in Peking, moreover, on occasions when the suc- 
cession to Kuang Hsu was discussed, that the Empress 
Dowager would not survive him. Such rumors, coupled 
with the coincidence attending the deaths, appear to be 
the only tangible foundation for reports that the Empress 
Dowager was assassinated; and in the absence of definite 
evidence, which, in the nature of things, is not obtain- 
able, official statements of the Government may be ac- 
cepted. 

However the manner of her demise, it may be that 
fate chose an opportune moment to call Tsi-an to join 
her ancestors; opportune, that is, for the best interests 
of the Empire over whose destiny she exerted such an un- 
usual influence. The career of Her Imperial Majesty is 
now interesting only as history; it is with the future of 
China that the world chiefly is concerned. It is, then;, 
satisfactory to note that the prospect before her is im- 
proved by these events. A new regime has been peace- 
fully inaugurated. It is probable that the progressive 
element — the practical reform party — becomes more 
firmly established in influence and power. For the first 
time in the history of the Empire the supreme author- 
ity is exercised by a man who has seen something of 
the world, whose mental vision is not limited by the 
walls of the Forbidden City. Prince Ch'un is a young 
man, born and reared during the period when mod- 
ern Ideas have gained foothold in the East, and has ob- 
served the West with his own eyes. He, therefore, can do 
what no other ruler of China has been able — estimate his 
country in comparison with other great nations. In the 



3IO THE FAR EASTERN QUESTION 

perspective of modern conditions. This justifies a reas- 
suring view of his attitude toward the problems which con- 
front China. 

The dismissal from office of Yuan Shih-k'ai, soon after 
Prince Ch'un assumed authority, created an unfavorable 
impression in the West ; but it is premature, I think, to re- 
gard this act as intimating a reactionary policy. In es- 
timating this incident certain peculiarities of official tenure 
in China should be considered; the tendency of factions to 
prevent any from becoming too powerful, and which fre- 
quently causes reorganization of the metropolitan ad- 
ministration. Any Chinese official by possessing extraor- 
dinary ability, and by preferment in the Government 
through Its exercise, thereby inevitably will incite antag- 
onisms which will seek to accomplish his downfall. Yuan 
Shih-k'ai Is subject to this rule, and there Is at Peking an 
influential faction composed of elements hostile to him 
personally, and which draws support from various and In 
themselves Incongruous motives. The ascendency of 
Prince Ch'un, who Is believed to be inimical to Yuan Shih- 
k'ai because of the part he took In the coup d'etat of 
1898, provided an opportunity for factions hostile to 
Yuan and the ideas he represents to combine to secure his 
dismissal. These personal vicissitudes among higher offi- 
cials are common In China (we may recall those of LI 
Hung Chang), and Yuan has experienced them before. 
It is, nevertheless, easy to understand why his dismissal 
at this juncture caused some uneasiness. He Is a moder- 
ate and practical reformer, as distinguished from enthusi- 
asts and revolutionaries, and occupied the position of a 
sort of political balance wheel at Peking, by possessing to 
a considerable degree the respect of all factions, and the 
confidence of the foreign diplomatic body, which made him 
an Influence for stability. It Is not probable, however, 



THE REFORM MOVEMENT IN CHINA 311 

that Yuan's elimination, if it is permanent, will cause a 
clash between extreme factions of the reactionary and 
revolutionary groups. Either of two courses seems prob- 
able : That Yuan permanently will remain in retirement, 
and another reform leader become prominent; or his de- 
position, especially if followed by reprisals upon other 
officials who have belonged to his group, may excite such 
opposition among the Chinese (as distinguished from 
Manchu) party that an internal schism may threaten, 
whereupon, if this assumes a serious aspect, Yuan may 
be recalled in order to restore equilibrium. If this dis- 
missal results in final elimination of Yuan Shih-k'ai as a 
factor in the development of the Empire it will indicate 
that he is not indispensable; or if he really is as necessary 
as some assume, the Government will find it politic to re- 
call him. Judging by what he already has accomplished. 
Yuan may be very useful to China. His retirement is in- 
teresting from an international viewpoint chiefly because 
it removes, at a critical time, a formidable opponent of 
aggressions of Japan and Russia in Manchuria. In any 
event, one hardly' may assume that reform is endan- 
gered. Reform has reached a point when It does not 
depend for eventual success upon any single individual or 
faction, but moves automatically and Irresistibly, Impelled 
by forces which reactionary cabals cannot more than tem- 
porarily check. That a period of uncertainty and reor- 
ganization would follow the demise of the Emperor and 
Empress Dowager was Inevitable, and It Is not more dis- 
turbing In China than usually Is the case, under similar 
circumstances, with other Governments. The progress of 
reform there will be attended by periodical eruptions, but 
none will long retard the grand march of events. 

In the Court circle, which heretofore has been hostile 
to progress, Prince Ch'Ing and Prince Pu Lun may prom- 



312 THE FAR EASTERN QUESTION 

inently figure. Prince Pu Lun also has been abroad, hav- 
ing been special commissioner for China at the Louisiana 
Purchase Exposition in 1904. He is thought to be a 
moderate reformer, and progressive in his ideas. It will 
be a novelty to see the Court controlled by men imbued 
with modern inclinations, a striking contrast from a Court 
influenced by lamas and eunuchs, and tied to the past by 
a host of effete customs and superstitions. This may 
mean that the Court from now on will encourage the 
reformation of China's Institutions; It even may become 
the leader in this movement. A progressive Court is all 
that is needed to make reform a certainty of the near 
future. That It Is entirely practicable, so far as condi- 
tions are concerned, is evident to any who study China, 
her institutions and her people with open eyes. Those 
who, obsessed by old notions of the East, cannot escape 
from the state of mind which they Induce, may continue 
to be pessimistic about China; but the best sentiment of 
the western world will wish her success In her new aspira- 
tions. 

While the effort to secure a constitution and assembly 
In China may excite sentimental Interest In America and 
Europe, this ambitious reform now promises less practical 
results than other proposed measures. China can wait for 
a constitution and representative government. These may 
in time assist to regenerate the Empire, but liberal institu- 
tions are not necessary to accomplish important matters 
which must quickly be undertaken. The abolition of ex- 
tra-territorlality also can wait. But recovery of pseudo- 
political foreign concessions and leaseholds, extension of 
a modern educational system, the creation of a modern 
army and navy chiefly require money; and to get money 
China must reform her financial and fiscal systems. Here, 



THE REFORM MOVEMENT IN CHINA 313 

then, is where real reform must begin. These reforms 
will make possible all the others. 

In attempting to analyze the financial and fiscal condi- 
tion of China, one encounters a serious difficulty at the out- 
set in that no official statements bearing on the matter ever 
have been published, and the Chinese Government pro- 
fesses to be ignorant of revenues and disbursements except 
those which accrue to the central administration. The 
greater part of the revenue is disbursed by provincial 
authorities, and each official, from viceroy to petty manda- 
rin, endeavors to keep secret the amount of taxes collected, 
since all above a certain amount is retained by him as his 
official perquisite, and if the central Government suspects 
that any province or district is yielding more revenue or 
can be made to yield more than is returned upon it may 
increase its demands. This system, usually called 
" squeeze," makes each official anxious to represent the 
taxes collected in his district at the minimum, and the 
central Government and Court does not object as long as 
it gets its correct proportion. Although metropolitan of- 
ficials often pretend to be ignorant of provincial and local 
revenues, they really are not, for nearly all metropolitan 
officials have held local and provincial posts. The rev- 
enues of every province and district are approximately 
known, although they vary considerably in good and bad 
crop years, and are affected by business conditions and nat- 
ural disasters. Most lucrative official posts are secured by 
purchase, which is evidence that their fiscal possibilities 
are known, since none would purchase a " pig in a poke." 
The " squeeze " system is a complex and elaborate com- 
bination of checks and balances, probably designed in the 
beginning to keep the people ignorant of how the revenues 
are handled and to prevent any official from getting more 



314 THE FAR EASTERN QUESTION 

than his share. The more I see of China, however, the 
more I am inclined to think, while fully appreciating eco- 
nomic defects of the " squeeze " system, that much west- 
ern criticism of it is based upon the dogma rather than the 
essence of morality, and fails to consider the complete cycle 
through which the laws of compensation and equalization 
operate here. 

Revenue in China is collected under the following 
heads : Land tax, tribute, native customs, salt gabelle, 
likin, maritime customs, and miscellaneous. How much 
revenue these various sources yield has been the subject of 
investigation and inquiry by foreigners with a view to 
learning something of the foundations of China's taxable 
wealth as a basis for estimating her solvency, but results 
that have been obtained are deduced largely by compari- 
son and analogy. Nevertheless, some estimates are be- 
lieved to be fairly accurate, and are founded upon reason- 
able deductions from known facts. The estimated reve- 
nues of China for the year 1907 follow: Imperial ad- 
ministration (about) $68,000,000.00; Provincial admin- 
istration (about) $116,000,000.00; Local administration 
(about) $28,000,000.00: total $212,000,000.00. Many 
persons who have investigated the matter believe that 
fully three times this amount actually is collected, and 
Sir Robert Hart estimated that the revenue can be 
raised to $600,000,000.00 without materially increasing 
taxation, by reforming fiscal administration. Other ex- 
perts have computed that China can secure a revenue of 
$1,000,000,000.00 a year without burdensome taxation. 
With such a revenue and an economical administration 
China's fiscal situation would be superior to that of most 
greater nations, and she could easily and quickly recover 
by purchase concessions now held by foreign governments, 
for with her credit once firmly established she can 



THE REFORM MOVEMENT IN CHINA 315 

redeem these concessions and leaseholds by bond issues. 

Until the end of the war with Japan, China had prac- 
tically no national debt. An indemnity to Japan and a 
further indemnity to the powers on account of the 
"boxer" disorders in 1900, together with some minor 
loans, created a debt of approximately $600,000,000.00, 
interest and principal to be paid in instalments. Part 
of these indemnities already are paid, and at present rate 
of payment, which China apparently has no difficulty in 
meeting, the debt will be cancelled by 1925. 

An idea of China's fiscal situation is afforded by a 
comparison with Japan. If the Chinese were taxed pro- 
portionately per capita as Japanese now are, the national 
revenue would be about $3,500,000,000.00 a year, and 
there is httle reason to doubt that Chinese can pay such 
taxation as well as Japanese, for their earning capacity 
is approximately as large, while the wealth and re- 
sources of China are incomparably greater than those of 
Japan. In China the per capita annual interest and sink- 
ing fund charge upon the people is about 7 cents ; in Japan 
it is about $1.50. In China the per capita national debt 
is about $1.40; In Japan it is about $25.00. At the same 
per capita ratio as in Japan, China could carry a national 
debt of more than $10,000,000,000.00. 

Who will limit the possibilities which lie before a na- 
tion so situated? China is strong in all basic elements of 
national prosperity and power, and hardly can fail to work 
out a notable destiny if she is permitted to do so. But 
greedy eyes are fixed upon her, some hungry exchequers 
yearn to get at this vast storehouse. And so across the 
path of reform in China falls the shadow of foreign inter- 
ference and coercion. The problem thus becomes a dou- 
ble one; to reconstruct internal administration while at 
the same time preserving the nation against disruption 



3i6 THE FAR EASTERN QUESTION 

from without, and it is the task of Chinese statesmen, If 
possible, to make each of these factors aid and support 
the other. A Chinese official who was educated in Amer- 
ica recently said to me: 

" The internal stability of China has been due to offi- 
cial jealousies. Her national existence now is due to in- 
ternational jealousies. The Chinese Government Is in- 
destructible from within, but is unable to resist external 
pressure. As we cannot tell when the international bal- 
ance of power, which depends largely upon its balance of 
interest, will shift, It will not do indefinitely to depend 
upon It to preserve our sovereignty. This only can be 
done by developing a new national llfe,jby reforming our 
Government." 

Apart from fear of foreign interference, the lion In 
the path of reform In China Is her official system, en- 
trenched behind Its bulwark of special privileges, whence 
It will not be routed without a hard fight. I doubt If the 
" squeeze " system nets to officials as great pecuniary re- 
turns as appears on the surface, owing to the Interlocking 
brood of beneficiaries which feed upon it, but it is firmly 
rooted in custom and habit, and cannot be replaced by a 
salaried list without disturbing the whole administrative 
fabric. This must be done, however, and in time it will 
be done. The " squeeze " system stands in the way of 
nearly every practical and needed reform which Is now 
being considered. It would be comparatively easy to give 
China a stable currency If It was not for the opposition 
of provincial officials whose perquisites are materially fat- 
tened by their control of local currency, and the further 
opposition of foreign banks in China which profit by fluc- 
tuations of exchange. But China is no worse off In this 







Pi 



THE REFORM MOVEMENT IN CHINA 317 

respect than some other countries, for reforms which ad- 
versely involve powerful interests everywhere encounter 
strong opposition. Corrupt and conservative Chinese offi- 
cialdom gradually will give way to necessity for reform 
because it must. Regarded purely as practical measures, 
every important reform now proposed in China is feasi- 
ble ; indeed, some of them can be accomplished more easily 
than would be possible in some western nations. 

Some broad-minded Chinese officials recognize that a 
way out of China's fiscal difficulties may be found by 
seeking the help of American and British capitalists. 
These men believe that these two nations have no ulterior 
designs upon China, and realize that investment in Chi- 
nese debentures or corporations of a large amount of 
American and British capital will to a certain extent be a 
guarantee of the Empire's stability and a safeguard against 
hostile foreign aggression, and may at the same time pro- 
vide means to reform the currency by creating a gold re- 
serve. They favor a compilation of the Empire's finan- 
cial situation and resources, and speedy development 
of railways and other enterprises by the introduction of 
foreign capital. But the popular phase of the " right of 
recovery " movement just now Is In the foolish stage. 
Realizing the danger to China's autonomy from some for- 
eign enterprises, many Chinese have jumped to the con- 
clusion that It Is desirable to shut out all foreign Investors. 
This disposition was shown by the popular attempt to pre- 
vent the Shanghal-Hangchow railway from being built 
with British capital, and by frequent refusal of the Peking 
Government to sanction enterprises which contemplate the 
use of foreign capital. This sentiment to some extent Is 
founded on just grounds, and Is for the moment swinging 
the Government to the extreme of rejecting even friendly 
and desirable foreign investments. This Idea, which Is 



31 8 THE FAR EASTERN QUESTION 

quite natural under the circumstances, is ephemeral and 
unsound, and will pass. It will not be long before the 
good sense and shrewdness of Chinese will reassert them- 
selves, and they will encourage desirable foreign invest- 
ors, while continuing to reject those which have a pseudo- 
political bearing. 

Notwithstanding the difficulties it is encountering, the 
reform movement has reached a stage when it must be 
taken seriously; indeed, it already has accomplished much. 
The new army is becoming an actuality. Many beneficial 
projects are afoot, not all entirely practical as now pro- 
posed, but intimations of a good spirit. The greatest 
need is for competent men; Chinese who are versed in 
modern administrative methods. A Chinese official of 
the younger generation said to me : 

" The different rate of progress of China and Japan is 
exemplified by the way the two governments have used 
the students which they first sent abroad. Japan received 
back these men and gave them important places in the 
Government, while China buried her foreign students in 
minor positions which might have been filled by common 
clerks. Among the higher metropolitan officials to-day 
there is only one who was educated abroad. If China will 
use her own best material she will not long have cause 
to complain of lack of competent officials." 

While there is justice in this complaint, it is also true 
that many of the later generations of foreign students have 
imbibed rather hazy and imperfect notions of liberal gov- 
ernment, and would be bad advisers for China in her 
present critical situation. These enthusiastic young men 
have alarmed older officials by an excess of zeal, and by 
advocating a too sudden revulsion from long used forms. 



THE REFORM MOVEMENT IN CHINA 319 

Many young Chinese have learned something of the forms 
of western civilization without understanding their funda- 
mental principles. 

One of the significant manifestations of the wan- 
ing of Japanese influence in China is the revulsion of 
opinion among Chinese about the desirability of a pro- 
Japanese education for the youth of China. It is safe 
to say that, at least for many years to come, fewer Chinese 
students will go to Japan. So far as it can without openly 
offending Japan's sensibilities, the Chinese Government 
is exerting its influence along this line. The direct reason 
is that many young Chinese who have, in recent years, 
been educated in Japan, have on their return to China 
become intemperate agitators. Feeling, however, that 
it is essential to progress of the Empire that many Chi- 
nese be educated abroad, the Government and gentry 
are considering where to send the students. Yuan Shlh- 
k'ai once told me that experience has demonstrated 
that Chinese who were educated in America have shown 
better results; and that this was no idle compliment is 
proved by the fact that Yuan surrounded himself with 
men who studied In the United States. Angered by the 
severe administration of our exclusion law, and feeling for 
the moment that a suitable education could be secured in 
Japan or Europe, China was turning away from America. 
But the last two years have brought many changes, and 
one_yjejLy_.5triking Indication of this Is the almost instinc- 
tive turning of China toward the United States. The old 
feeling of trust and friendship toward America Is reviv- 
ing, and with it once more comes the wish to send young 
Chinese to our schools. The decision of the Government 
to use the restored portion of the "boxer " indemnity 
for this purpose is a practical demonstration of this senti- 
ment. 



320 THE FAR EASTERN QUESTION 

The new educational movement is one of the more far- 
reaching elements of reform, since it directly or indi- 
rectly touches and influences all effort toward change. 
Modern schools are not new in China. Missionary 
schools and colleges have been maintained for many 
years, and the Chinese Government has taken steps to 
create a better system in the universities. Until within 
the last few years these moves have been hesitating and 
half-hearted, the Government chiefly being influenced by 
pressure from without. Now it is different. A stimulus 
from within is beginning to be felt. Chinese are coming 
to realize the benefits to be derived from modern edu- 
cation. It is estimated that in 1907 there were about 
16,000 Chinese students abroad, of which 11,000 were in 
Japan, on account of the low cost of living there for Ori- 
entals in comparison to western countries. Chinese par- 
ents who can afford the expense still prefer to send their 
sons to America or Europe, but a course of education in 
Japan is within the reach of tens of thousands of boys 
who never could hope to get further abroad. But there 
remain the millions who are unable to leave China, and 
they are demanding facilities at home. 

The full effect of this desire of the youth of China 
to acquire a modern education will not be felt for years, 
but this influence already is quite a power. Schools are 
being opened in all parts of the country. An interesting 
point is that these new schools, which as yet are chiefly 
sustained by private subscription, are supported by the 
gentry of the various localities where they have been es- 
tablished. Ten years ago the establishment of such 
schools would have been opposed by the greater part of 
the gentry, and by most officials. As the views of the 
gentry change, the official class is compelled to meet them, 
and reaction becomes more difficult. 



THE REFORM MOVEMENT IN CHINA 321 

A power in China is the new press, which, owing to 
extra-territorial conditions, is able to comment quite freely 
upon governmental affairs. It exercises a great influence 
jupon the popular mind, and under intelligent direction 
can be made a great force for progress. Its initial en- 
thusiasm is expended largely along what are, in America, 
called " yellow " lines. It is probable, however, that this 
inclination will be curbed, (indeed, the Government has 
taken measures to do so) and that there will be a rever- 
sion to more conservative methods; in fact, this tendency 
already may be noticed, since widespread attention has 
been attracted to the native press and the influences which 
control it. 



CHAPTER XXIV 

MODERN INDUSTRY IN CHINA 

Beginnings in Modern Manufacturing — Elements 
Involved — Chinese Labor Conditions — Vast Supply of 
Human Energy — Adaptability of Chinese to Modern 
Industrial Methods — Development of Modern Indus- 
trial Capability — Wages and Output — Comparative 
Cost of Production — Oriental Standard of Living — 
Probabilities Estimated — Raw Materials — Capital — 
Hidden Wealth of the Chinese People — Lack of Ade- 
quate Banking Facilities — The Chaotic Currency — 
Status of Modern Industrial Projects — Railways in 
China — Their Earning Power — Future Development 
— Opportunity for American Enterprise — Backward- 
ness OF American Business Interests in China — Chin- 
ese Attitude Toward Modern Methods — Possibilities of 
THE Chinese Market — Possible Effects of China's In- 
dustrial Development Upon America. 

None of the revolutionary forces now moving in China 
is more interesting to the West than her beginnings in 
modern manufacturing. In them some profess to perceive 
that bugaboo of western industry, already moving with no- 
ticeable impetus in Japan — the spectre of direct competi- 
tion with Oriental labor, which may, in time, disturb the 
economic equilibrium of the world. 

In China, as elsewhere, the main factors which must 
be applied to the creation of a modern industrial system 
are material, labor and capital. It is not often that all 
of these elements are found grouped in satisfactory pro- 

32« 



MODERN INDUSTRY IN CHINA 323 

portions in any single locality or country. Usually one 
or more have to be brought, frequently from afar, and it 
sometimes happens that all are conveyed from divergent 
places and assembled where they are combined to produce 
an article or accomplish an undertaking. 

Of these elements the least mobile is labor, as a rule, 
and in the course of industrial progress, especially since it 
assumed its present form, the general tendency has been 
to bring material and capital to where labor is plentiful 
and cheap. No country in the world equals China in 
the amount of one kind of labor — human energy — that 
she has at hand. It is safe to say that no people excel the 
Chinese in industry, in the narrow sense of the term. 
They are willing workers, having existed for centuries 
under circumstances where idleness often meant starva- 
tion, and the aversion to manual labor now so noticeable in 
the West has never gained a foothold. All members of 
an ordinary family work. Until quite recently this labor 
was employed in old-fashioned ways, which, by limiting 
and confining its production, has kept wages at a low 
level and established the standard of living on a corres- 
sponding plane. 

These conditions are now undergoing a transformation, 
the ultimate importance of which hardly can be overesti- 
mated. Modern machinery is being introduced into 
China as it has been into Japan. No intelligent observer 
of Chinese disputes their cleverness and adaptability when 
they can be emancipated from the antiquated ideas which 
for so long influenced them. Students of progress of the 
human race know that some important mechanical princi- 
ples now universally applied were discovered by the Chi- 
nese, who used them in crude form thousands of years ago, 
and do still so use them. Yet some persons have until 
recently held the opinion that Chinese are unfitted for 



324 THE FAR EASTERN QUESTION 

modern Industry. This idea, like many others once enter- 
tained about them, is now discredited. It is well es- 
tablished that Chinese readily adopt modern industrial 
methods, and quickly develop a fair degree of capability. 

While these general facts are recognized, I think that 
some inaccurate deductions are made from them. Chi- 
nese have gotten over their prejudice against machinery, 
as they have discarded so many of their old ideas and 
superstitions, and with machinery they can produce many 
articles more rapidly and In some cases better than formerly 
were made by hand. But whether they will develop in- 
dustrial capability and capacity equal to that which ob- 
tains, let us say. In America, Is a proposition which Is not 
to be granted outright, for It clearly Involves other factors 
beside that part of labor expressed In human energy. 
Whether labor Is dear or cheap depends not on the rate of 
wages, but on Its efficiency. If a man receiving $5.00 a 
day can accomplish something that requires the cumula- 
tive efforts of ten other men who each receive 50 cents a 
day. It Is evident that the five dollar laborer is cheaper, in 
a broad industrial sense, since he can exist on less than 
the ten fifty cent laborers; and a comparison based ex- 
clusively on the rates of wages would oe of little value In 
determining cost of production. 

To estimate comparative cost of western and Oriental 
labor, under present and future conditions, Involves con- 
sideration of some puzzling propositions. Where me- 
chanical adjuncts are used, the relation of man to the 
machine never has been exactly determined; but results 
seem to Indicate, everywhere, that machinery cannot to 
any great extent take the place of human Intelligence, al- 
though It may replace physical human energy. If this 
may be taken as Intimating a principle, mechanical devices 
accrue to the advantage of superior Intelligence In labor. 



MODERN INDUSTRY IN CHINA 325 

At present the West has a decided lead over the East in 
this factor. The general condition of labor in China, 
as it now is applicable to modern forms of production, is 
very similar to that in Japan. Both countries now and 
must for a long time suffer from lack of what is known 
in western countries as skilled labor. Skilled labor is not 
the birthright of any people : it is a result of evolution. 
Orientals are skilled to a remarkable degree in many 
forms of production; but this skill is not of a character, 
as a rule, to be useful in modern industry. This modern 
kind of skilled labor now is largely confined to the West, 
and America, notwithstanding the comparatively high 
rate of wages which prevails there, produces many arti- 
cles now stable in the world's commerce cheaper than they 
are produced elsewhere. 

Another matter deserves consideration In this connec- 
tion. While the standard of living now Is low In the 
Orient, It Is not so because of preference on the part of 
the people. Chinese and Japanese will live better If they 
can. The tendency wherever they come In contact with 
westerners Is to advance their own standard of life. It 
seems to be Inevitable that with further Introduction of 
modern Industry into China, and gradual development of 
skilled labor to operate It, there will be a disposition for la- 
borers to advance their standard of living. A contrary 
result would be reversal of a universal human trait. And 
if It does happen, this question arises : Will not the dis- 
position of Orientals to adopt a higher plane of living, 
and consequently to demand better wages, about keep pace 
with development by them of Industrial proficiency In mod- 
ern lines? If this should prove true, the economic ac- 
count, based upon cost of labor, approximately will bal- 
ance. 

A factor in the development of a modern Industrial sys- 



326 THE FAR EASTERN QUESTION 

tern in China is the labor guilds, which are analogous to 
labor unions in the West. These guilds, which embrace 
almost every form of labor, have great power, and 
can paralyze any industry in China by united action. It 
is reasonable to assume that they will be felt in the forth- 
coming evolution on the side of obtaining better condi- 
tions for the working masses. It even is conceivable that 
should labor unions in the West seriously begin to feel 
the pinch of Oriental wage competition, walking delegates 
will cross the Pacific and extend their organizations among 
Chinese, by affiliating with labor guilds there. Chi- 
nese labor unions are the oldest in the world, and present 
a solidarity not exceeded anywhere. Another matter sure 
to exert influence is that Introduction of modern industry, 
with its attendant mechanical adjuncts, inevitably will dis- 
turb many existing industries upon which millions depend 
for a livelihood, thus creating antagonisms that will op- 
erate as a retarding Influence. 

The second element of Industry, raw materials, has here 
the usual complexities. China contains or can produce 
nearly everything necessary to widespread Industrial de- 
velopment, and here she has enormous natural advantage 
over Japan, which produces very little; but she Is a long 
way from the time when these resources will be available 
in full measure. China probably has the greatest coal 
fields In the world; she has oil, natural gas, all kinds of 
minerals in considerable but uncertain quantities, and her 
climate encourages almost all forms of agriculture. The 
Empire Is as rich In natural resources as the United States, 
and people to develop them also are there. If their efforts 
are Intelligently directed. Obstacles, however, are nu- 
merous, and it will require years to remove or modify some 
of them. Probably the greatest present hindrance is lack 
of transportation, a factor vital to industrial progress in 



MODERN INDUSTRY IN CHINA 327 

any country; but a railway system which will, in conjunc- 
tion with waterways, make all parts of the Empire accessi- 
ble is sure to be constructed. 

Given labor and materials, the third necessity to devel- 
opment of closely organized industry under modern con- 
ditions Is capital. This Is the more mobile of the major 
Industrial elements. Capital can be moved anywhere at 
small trouble and expense; so It requires no argument to 
show that capital can come to China if sufficient induce- 
ment is offered. There Is great wealth In China, but con- 
ditions are now adverse to its application to the progress 
of the country on modern lines. It Is not possible accu- 
rately to estimate the amount of capital which China could 
now produce. Conditions there have for centuries been 
such that wealthy Chinese endeavor to keep their wealth 
secret lest they become victims of official rapacity and ex- 
action. The average Chinese is saving by instinct and 
custom. It Is said that with growing prosperity a Chinese 
acquires possessions In the order named: a wife, good 
clothing and some gold leaf (pure gold beaten Into thin 
plates). With greater prosperity he gets more wives, 
clothing and gold leaf, and an assortment of jewels and 
works of art. The amount of gold and silver bullion hid- 
den away In China is known to be very large. It is be- 
lieved that the Chinese people can produce a billion 
dollars of gold at any time if some means to Induce them 
to part with It is found; just as the French, to the sur- 
prise of the world, brought forth hard money to pay the 
indemnity to Germany In 1871. 

Notwithstanding the great bullion reserve which the 
people now have hidden, so to speak, in their stockings, 
and which represents the accumulations of centuries, China 
Is not In a position alone to finance an extensive internal 
development. One drawback is that there is no Chinese 



328 THE FAR EASTERN QUESTION 

bank or Institution capable of financing large enterprises; 
another disadvantage is the chaotic condition of the cur- 
rency, which detrimentally affects all business interests ex- 
cept exchange banks and brokers. But the chief reason is 
that the country has no corporation law, nor law of any 
kind that affords adequate legal protection to large Invest- 
ments, except those promoted by the Government, such as 
would satisfy foreign capitalists or up-to-date Chinese. 
A result of this condition Is that even Chinese enterprises 
are impelled to incorporate with foreign charters, and to 
establish their offices in one of the treaty ports where they 
may have foreign protection. This requires cooperation 
of foreigners and foreign banks, and these usually Insist 
upon retaining entire or partial direction of the activities 
Involved. 

Modern projects are being promoted In all parts of the 
Empire. A waterworks Is proposed for this city, an elec- 
tric light and power plant for another, a telephone system 
here, an electric tram-line there, a flour mill yonder, and 
so on. Many of these projects are promoted by for- 
eigners associated with China, and many now originate 
with Chinese promotors and capitalists, who show a grow- 
ing disposition to exclude foreigners from ownership of 
them. This disposition, which Is a passing phase of 
" China for the Chinese " sentiment, encounters difficulties 
among Chinese themselves. Chinese are very astute in 
business, and familiar with lax administrative methods 
In their own country. A Chinese usually Is Indifferent 
to this In official matters, but when he puts money into 
a project he wants a fair chance to secure his capital and 
profits. So Chinese are cautious about going Into any 
modern enterprise with which foreigners are not asso- 
ciated, at least In the management. They may be anxious 
to exclude foreigners from the profits, but they gravely 



MODERN INDUSTRY IN CHINA 329 

fear, under existing conditions, that without foreigners 
there will be no profits. Some Chinese devices to attract 
popular subscriptions to business enterprises are interest- 
ing, such as the plan to finance a railway by means of 
a lottery. Here is old China cropping up again. These 
are ephemeral phases, however. The prevailing move- 
ment is toward western standards and methods, and while 
the new idea may suffer temporary checks, nothing now 
can permanently turn it from its course. 

It is probable that in the next twenty years China will 
lead the world in railroad construction. There are now 
4,500 miles of railways in operation, more than 1,000 
miles under construction, and from 2,000 to 3,000 miles 
of projected lines which are almost certain to be built soon. 
The two more important lines now operating are the 
Imperial Railways of North China and the Peking- 
Hankow railway. A statement of the receipts and earn- 
ings of the Peking-Hankow railway for the first two 
operating years, which was published in 1908, showed a 
net profit of $1,600,000.00 per year. At this rate of 
profit the hne will pay for itself, capital, interest and 
other liabilities, within fifteen years. The net profits of 
the Imperial Railways of North China for the years 
1904—7 average about $4,000,000.00 on a total mileage 
less than that of the Peking-Hankow railway. These 
figures will not be lost upon Chinese and foreign capital- 
ists, since they demonstrate beyond peradventure that rail- 
ways are profitable investments here. A foreign engineer 
told me that he believes that 50,000 miles of railway will 
be built In China within twenty years, and that the country 
now can support 250,000 miles of trackage. Once rail- 
way development gets fairly going. Its progress may be 
comparable to that in America during the last quarter of 
a century. 



330 THE FAR EASTERN QUESTION 

This webbing of China by railways must excite interest 
in the West because of the enormous internal development 
which will attend it; and It also means a large market for 
railway materials and supplies. Here is a great oppor- 
tunity for American manufacturers. British and Euro- 
pean firms already are seeking this business, with excellent 
prospect for success; but they have no advantage over 
American firms except by the exercise of greater enter- 
prise and more intelligent methods. I believe that other 
things being equal Chinese would now rather buy from 
America than from England, Europe or Japan. This Item 
of railway supplies may serve to Illustrate some disabilities 
under which Am.erican trade now labors in the East. 
These disabilities are partly due to inadequate governmen- 
tal encouragement, and partly to Indifference and lack of 
enterprise on the part of American manufacturers. 

The stimulation afforded by the United States Govern- 
ment to American commerce in the East must be estimated 
by comparison with what other nations do. Several Euro- 
pean nations have accredited " commercial attaches " at 
Peking, who are connected with their legations there and 
have, consequently, official standing. The duty of a com- 
mercial attache Is to travel about the Empire, Investigate 
and report upon commercial conditions, and suggest ways 
and means to promote the trade of his nationals. It Is 
his business, also, to directly Intercede In favor of projects 
advanced or promoted by his nationals. The commercial 
attache Is really a national " drummer," but he has an ad- 
vantage over the ordinary commercial traveler. His offi- 
cial rank gains him admittance to high Chinese officials 
and makes him socially persona grata. Thus he may 
have an opportunity while at dinner to engage a Viceroy 
In conversation about railway matters In general, and take 
occasion to suggest an arrangement whereby a foreign 



MODERN INDUSTRY IN CHINA 331 

firm will get a large contract. In this way projects can 
be directly broached to men who have power to decide 
about them, when they might never be reached through 
ordinary commercial channels. 

In his own country or in any familiar environment the 
American business man has no superior, but in trying 
to do business abroad he frequently displays inferior intelli- 
gence and enterprise. The average American manufac- 
turer resolutely shuts his eyes to peculiar conditions in the 
East, and often refuses to be enlightened even by his own 
agents. Now people who wish to do business with Orien- 
tals must try to understand them, and at least meet them 
and their ideas half way. There is not a trick or turn in 
the commercial game that Chinese did not fathom cen- 
turies ago. The only difficulty in selling them modern 
industrial products is in convincing them that they will 
profit by the transaction, and this requires explanation. 
Take an actual case for illustration. Learning that China 
intends to create a large modern army and navy, British 
and German firms which supply materials, including ma- 
chinery, needed to carry out such a project, have sent 
agents to China to try to secure this business. These 
agents set up in style, and are introduced by diplomatic 
and consular representatives of their governments. Hav- 
ing got a foothold, they seek an opportunity to place 
their proposals before the Chinese Government. They 
will present a broad plan in which all the economies of 
the proposition, including a way to finance it, are set 
forth, and showing in detail how China will profit by the 
transaction. To prepare such a proposal requires expert 
knowledge and months of work, which is done by the best 
talent at the command of the foreign firms. The pro- 
ject involves not only arms and ships; it also must in- 
clude arsenals where weapons and projectiles can be man- 



332 THE FAR EASTERN QUESTION 

ufactured, naval yards and docks, plants for making ar- 
mor plate, factories for making all kinds of military and 
naval equipment, with drawings, plans and estimates fully 
illustrating every phase of the matter. Little by little 
all this must be expounded to Chinese officials who have 
responsibility in the matter until they are convinced. To 
carry through such a project sometimes takes several 
years, and rarely can be done in less than one year. 
Meanwhile, the agents of the foreign firms stop in China, 
live expensively and entertain liberally. This is the game 
as our competitors play it. 

Consider the ordinary American way, still following, 
without mentioning names, an actual case that I know of. 
An agent of an American firm, which supplies materials 
needed for such a project, learned what is going on, and 
further learned that the Chinese, for pohtical reasons, 
would prefer to place at least part of the contemplated or- 
ders in the United States. Any other government would 
have seen to it, through its official channels, that the desir- 
ability of this action was impressed upon Chinese; but 
not ours under the recent somnolent administration of 
our legation at Peking. In this case, the Chinese figured 
It out for themselves and took the initiative. An agent 
of the American firm, saw a chance to reap the benefit of 
pioneering work already done by the English and Germans 
In getting the project before Chinese officials; so he wrote 
to his firm In America requesting It to prepare plans and 
estimates which might be used by him In presenting pro- 
posals. Instead of elaborate plans and estimates, In due 
time the agent received a brief letter, the gist of which 
follows : 

" Let us know what they want and we will put In a 
bid." 

In a momentary fit of disgust, the agent cabled : 



MODERN INDUSTRY IN CHINA 333 

" They don't want anything." 

And this literally was true. In a large sense the Chi- 
nese do not want foreign products; they do not want to 
build railways, iron works and warships, cotton mills and 
machine shops. They would have been quite content to 
continue as they were in the ways of their forefathers. 
Change is being forced upon them. They now realize 
that it is inevitable, but they need to be convinced again 
and again of the necessity and advantage of each succes- 
sive step, and here subtler methods of foreign competi- 
tion enter and operate. 

Directly contrary to the spirit of the American firm in- 
dicated by the foregoing illustration is the policy pursued 
in the East by two great American corporations — the 
Standard Oil Company and the British-American To- 
bacco Company. By persistent and intelligent work, by 
perfect organization and profound study of conditions, 
these firms have introduced their products into China and 
made them popular there. In doing this they have made 
a new market for two staple American products — oil and 
tobacco. The Chinese literally had to be taught to use 
both of these articles, and now their consumption of them 
is enormous, giving tobacco fields and oil wells in America 
value when otherwise they might be unproductive. As an 
example of methods used by these firms to create wants 
for their products among Chinese may be mentioned that 
the Standard Oil Company has introduced more than two 
hundred styles of oil consumers, suitable to all uses and 
incomes. Extraordinary pains has been taken to make an 
oil consumer of the poorest family. Recently this firm 
had manufactured in America a number of small lamps 
to be sold, through its Chinese dealers, for a few cents 
each. A shipment of 500,000 of these lamps was brought 
out, and one of the company's agents took some samples 



334 THE FAR EASTERN QUESTION 

on a trip into the interior for the purpose of showing them 
to Chinese dealers. His first stop was at a city on the 
Yiang-tze river, which suppHes a large population in the 
country behind it. He showed the lamps to several lead- 
ing Chinese merchants, who seemed pleased with them, 
and said they would take some. 

" How many will you take?" asked the agent of one 
Chinese merchant. 

" I will take 200,000," he replied. 

" I will take 250,000," said another merchant. 

*' Hold on, gentlemen," said the agent, " go slow. We 
have only 500,000 of these lamps." 

All orders had to be cut down so as to distribute the 
lamps equitably among the firm's distributors throughout 
the Empire, and the agent cabled to New York for another 
supply to be sent. This incident gives an Idea of the 
market in China for any article which suits the needs 
of the people. It was not necessary to talk the Chinese 
merchants into buying these lamps. Their ready accept- 
ance of them was the result of painstaking work done be- 
fore. To supply these lamps a factory in America will 
be kept busy, and a large market for them is assured. 
Thus does the establishment of a market in China for one 
foreign article create a demand for many, and the enter- 
prise of a few firms paves the way for others. If a hun- 
dred American firms were now pushing their interests in 
China like these two it would not be long before Ameri- 
can trade in the East would assume a commanding posi- 
tion. 

In respect to railway development in China, It behooves 
American manufacturers and financiers to bestir themselves 
if they wish to get their due share of business. Although 
Chinese are just now averse to having their greater enter- 



MODERN INDUSTRY IN CHINA 335 

prises financed by foreigners, this objection does not apply 
to America with the same force as to some other nations, 
and diplomatic effort can efface such sentiment in our case.- 
There is opportunity for a group of American financiers 
to offer to finance the building of railways in China, at 
least in so far as supplies are purchased in America, tak- 
ing railway or Government bonds in payment, thus giving 
the Chinese time to meet their obligations. Such pro- 
posals, countenanced by the United States Government in 
the sense of lending proper diplomatic support, will not be 
regarded by Chinese as having Indirect political bearing, 
or as a menace to China's sovereignty. It is no longer 
possible to doubt that railways in China afford good se- 
curity for foreign loans. 

A more specific description of modern Industry In China 
might be interesting; how armor plate and steel rails are 
made at Hanyan; how large guns and projectiles are 
manufactured at Wuchang; how locomotives and railway 
rolling stock are assembled and even completely manufac- 
tured at Tong-shan, Hankow and Wusung; how cotton 
mills are profitably operated at Shanghai; how bicycles 
and automobiles are built; the good qualities and defects 
of Chinese as mechanics and engineers. These matters 
play a part in creating the new China. The Hanyan iron 
works are providing many steel rails for the Peking- 
Hankow and Canton-Hankow railways, and the Gov- 
ernment intends to make ship building materials. Some 
modern products are now produced in China more dearly 
than they may be purchased in Europe and America, but 
this is regarded as a temporary condition. That China 
Is progressing Industrially may not be doubted. The 
growth of the larger treaty ports continues to astound the 
occasional visitor. Real estate values In Hankow and 



336 THE FAR EASTERN QUESTION 

Shanghai have more than doubled within the last three 
years; in Shanghai half the streets were, when I was last 
there, partly blocked by building operations. 

It may be too soon to attempt to draw definite conclu- 
sions concerning modern industry in China, but what has 
been accomplished significantly suggests its possibilities. 
That the subject possesses fundamental interest to Amer- 
ica, to a greater extent, perhaps, than to any other west- 
ern nation, is evident. The American people inevitably 
will be affected by industrial development of the East, and 
American statesmen should consider whether our relation 
to the question Is to be supervisory and elective, making 
Oriental progress a reflex and sympathetic concomitant 
of our own by building it upon reciprocal principles, or 
whether It will proceed on unsympathetic and detrimental 
lines, perhaps be directed in a hostile spirit. Our natural 
advantages In trading with the Far East are apparent, 
and it is for the American people to say whether they will 
be utilized. 





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CHAPTER XXV 

AMERICAN TRADE IN CHINA 

Development of China's Foreign Trade — Conditions 
Which Surround It — The Maritime Customs — Pro- 
posed Modifications — Elements Involved — Possible Ef- 
fects — Comparative Position of Foreign Powers — 
Growth of American Trade — Second to Great Britain 
— Progress Without Encouragement or Stimulation — 
America's Commercial Rivals in China — Possible Devel- 
opments — Land-borne Trade Regulations — Factors in 
the Coming Struggle — Methods of Competitors — For- 
eign Banks in China — Increased Consumption of Foreign 
Products — China's Power of Commercial Retaliation — 
The Guilds. 

In attempting to estimate the future of American trade 
in the Far East, it is interesting to consider the present 
and prospective positions of America's chief rivals In that 
part of the world, and means employed to advance their 
Interests. The conditions and circumstances under which 
foreign commerce with China has so far developed prob- 
ably will continue for a considerable period unless the 
Empire falls Into pieces. Since 1842, when she lost her 
tariff autonomy and fell under the partial domination 
of foreign powers, in respect to this important branch 
of her fiscal system, China's foreign trade has progressed 
along fairly equitable lines, usually unattended by the 
upheavals which accompany commercial development in 
most countries. But new elements are constantly Injected, 

337 



338 THE FAR EASTERN QUESTION 

some of which carry possibihties of significance to the 
United States. 

To understand the general trade situation in China 
it is necessary briefly to review some of the conditions 
which circumscribe it. When China became indebted to 
foreign nations, the state of her fiscal system was such 
that she was required to guarantee payment of interest. 
Her only tangible asset at that time which could be safe- 
guarded for the purpose was revenue produced by the 
maritime customs. In time it became evident that this 
guarantee would prove ineffective and insecure unless a 
way was devised to assure efficient administration of the 
customs: so that part of revenue produced by tariff upon 
goods imported from abroad was set aside, and placed 
under supervision of foreign administrators. Thus began 
the system which, under the management of Sir Robert 
Hart, has until quite recently progressed with comparative 
satisfaction to all concerned. The tariff was designed 
solely as a revenue measure, and was fixed at the uniform 
rate of 5 per cent regardless of the character of articles. 
The method of appraisement has varied somewhat in the 
course of time, and is now based on fixed valuations as 
shown by market prices in certain years, on which specific 
duties are charged. For many years this system pro- 
duced a greater revenue than was required to pay interest 
abroad, the balance going to the Imperial Government. 
This gave the Government an interest in the efficient ad- 
ministration of the customs, and Sir Robert Hart and his 
subordinates were permitted to work undisturbed. 

Flowever, this condition no longer exists, and there is 
evidence of inclination by the Chinese Government to take 
over the administration of the maritime customs. Chi- 
nese administrators were appointed in 1906 to act with 
Sir Robert Hart, and many persons in China believe 



AMERICAN TRADE IN CHINA 339 

that this move is preliminary to gradual restoration of 
the customs to Chinese management, although interna- 
tional pressure has so far preserved the status quo. The 
reasons for this disposition of the Government have two 
bearings. Within the last ten years, by having been 
compelled to pay indemnities to Japan and other foreign 
powers, China's foreign debt has greatly increased, with 
a result that the customs revenue no longer produces a 
surplus which goes into the treasury. Thus the Govern- 
ment no longer has a direct interest in maintaining its 
efficiency and integrity, since all the revenue it produces 
goes abroad. The official class always has opposed the 
system, and growing restlessness of Chinese under foreign 
domination of any kind now gives this opposition popular 
backing. 

In agitation among foreigners to prevent, by interna- 
tional pressure at Peking, any further interference with 
present administration of the foreign customs, the chief 
arguments are based upon a possible depreciation of 
China's security to foreign investors; but this is not the 
most important phase of the matter. Its real significance 
lies in the possibility that, should China regain control 
of her customs administration, a condition may be created 
where discrimination in favor of some foreign trading 
nations, and against others, may creep In ; which thus seri- 
ously may touch American, as well as other Interests. 

In respect to China's motives In reaching for control 
of her maritime customs, several Influences are at work. 
One is desire for increased revenue. It long has been 
evident to Chinese officials that a level duty of five per 
cent is not all the trade can bear without lessening Im- 
ports, and they have been anxious to increase It. Foreign 
powers have observed this disposition, and some of them 
are inclined to accede to it under certain conditions, pro- 



340 THE FAR EASTERN QUESTION 

vided China will make concessions in other directions 
calculated to aid the development of foreign trade within 
the Empire. Three treaties along this line have been 
negotiated : those with England, America and Japan which 
were signed in 1902 and 1903. The British and Jap- 
anese treaties provide for an increase of the duty from 
five to twelve and one-half per cent, China agreeing to 
abolish likin on British and Japanese products as an offset 
for this concession. The treaty with the United States 
provides for the same increase, but contains no provision 
for abolition of likin. The likin is a great handicap upon 
Internal commerce; but as It provides a goodly share of 
local and municipal revenue, the official class is opposed 
to Its abolition. Although they have been, nominally 
In effect for some years now, these treaties are as yet 
absolutely a dead letter, and there Is no prospect of their 
being observed soon. The reason lies in the fact that 
In order to affect any alteration In the conventional 
tariff system It is necessary to obtain the consent of all 
foreign nations which were parties to the original agree- 
ment. Not more than half a dozen nations have a 
trade In China worth considering; yet a nation like Nor- 
way or Denmark can, by failing or refusing to con- 
sent, block attempts at tariff revision. It Is Impos- 
sible that such an anomalous situation will be Indefinitely 
continued, and an International conference to consider 
the subject should be called. Until something is done 
to secure united International action the deadlock will 
continue. When the Chinese commissioners who vir- 
tually supersede Sir Robert Hart were appointed, It was 
believed by some In Peking that Japan was backing 
China In this attempt to assert her autonomy, In order to 
open the way for a reciprocity treaty favorable to Japan, 
but at the crucial moment Japanese support failed to 



AMERICAN TRADE IN CHINA 341 

materialize, and China thought it prudent to modify her 
position. Well-informed persons In China feel that the 
matter has not been abandoned, and that it contains the 
genesis of a plan to bring the foreign customs entirely 
into Chinese official control. This is a perfectly legit- 
imate ambition for China; but as the tariff may play an 
important part in competition by the powers for trade 
In the Empire, the matter contains serious possibilities. 

The foreign nations which have a political foothold 
in the Far East, and are striving for commercial advan- 
tage there, with reasonable prospect of substantial suc- 
cess, are Great Britain, Japan, Germany, France, Russia 
and the United States. Other nations (eighteen have com- 
mercial treaties with China), while they have some trade, 
really are negligible quantities In so far as being able to 
exert real Influence, although some of them may be used 
as a cloak for more powerful Interests. Commercially, 
America's formidable competitors In China are England, 
Japan and Germany, and It may serve the purpose of this 
examination to confine comparisons to them. Notwith- 
standing present national Indifference to wider prospects, 
and comparative lack of consistent effort to promote east- 
ern trade, America's natural advantages In commerce with 
the Far East have given her a strong foothold, which 
at present, all things considered, compares favorably with 
her chief rivals. The fiscal year of 1905 gave a remark- 
able Impetus to American trade, especially when it Is re- 
membered that this was the year of the " boycott." 
Owing to anomalies created by the establishment of sev- 
eral foreign ports virtually within the limits of China, 
such as Hongkong, Dalny and Tsingtau, it is difficult to 
obtain accurate statistics about the foreign trade of China. 
The aggregates are easy to discover, but the proportionate 
business done by various nations is hard to get at. Within 



342 THE FAR EASTERN QUESTION 

the last few years the Chinese import customs has begun 
to compile statistics bearing on these points, and several 
important matters still are somewhat obscure. Basing 
them upon figures obtained from the statistical depart- 
ment of the customs, and information secured from other 
equally reliable sources, I think the following com- 
parisons are substantially accurate. 

American exports to China reached the highest point 
In 1905, when there was an abnormal Increase In the 
Importation of American cotton goods. In that year 
America's export trade almost equalled that of Great 
Britain, but this position was not maintained, for the next 
year showed a slump which equalized the extraordinary 
gain of 1905. In the years 1905—6 four nations — Great 
Britain, Japan, Germany and the United States — supplied 
86 per cent of all foreign products which entered China 
through the maritime customs. Taking an average of 
these years, the comparative trade of these nations In 
China was as follows : Great Britain, 37 per cent; United 
States, 28 per cent; Japan, 27 per cent; Germany, 8 per 
cent. In the years 1902—6, Inclusive, the average annual 
export trade to China of the leading nations follows: 
Great Britain, $75,000,000.00; Japan, $58, 000,000.00; 
United States, $52,000,000.00. These figures are In 
round numbers, and pretend to be approximate only. 
Prior to 1905 the direct Imports from Germany were not 
computed separately. These figures are obtained by ap- 
proximately estimating the proportion of exports of these 
nations which reach China indirectly through Hongkong 
and other ports, and are not presumed to be exact. The 
trade credited to Great Britain does not Include Imports 
from India. 

Lest this somewhat flattering showing should create a 
wrong Impression of security in America, It Is well to 



AMERICAN TRADE IN CHINA 343 

consider some phases of the competitive situation, which 
no statistics reveal. A few main propositions stand out 
distinctly. England retains the first position, which she 
has held ever since China has had a foreign trade worth 
mentioning, and her trade is increasing; but in comparison 
with some of her competitors she is losing ground by not 
progressing so rapidly. Both America and Japan are 
gaining upon her. The last few years America has 
gained upon England, and practically overtaken Japan; 
but Japan was for a time engaged in a war, and part 
of America's increase was due to extraordinary condi- 
tions created by that war «and may not be a permanent 
gain. It is, however, conclusively demonstrated that there 
is a large market for American products in China, and 
it is to the future, rather than the present, that we should 
look. The possibilities of foreign trade in Chma have 
not yet been fathomed, and within the next quarter of a 
century its development will be enormous. America wants 
her fair share of this trade, the share to which she legiti- 
mately is entitled, and which she will get if her products 
continue to enter the market under the same conditions 
that apply to those' of other nations. 

So far, American trade in China has secured and re- 
tained a foothold without the assistance of special stim- 
ulation, either private or governmental. That it has 
reached its present magnitude is evidence of its inherent 
strength, and gives an Idea of the dimensions it may attain 
with proper encouragement. Let us glance at the efforts 
some of our competitors are making. Take Germany. 
Germany's trade in China at present is almost insignificant, 
as I have shown, notwithstanding obvious indications of 
her commercial activity to be seen on every side. But 
she will have trade in the great future that is coming If 
she keeps on as she Is doing. German subsidized steam- 



344 THE FAR EASTERN QUESTION 

ship lines ply Far Eastern waters, and the German flag 
waves in every port. The German commercial bureau 
in the Far East is an interesting device to promote Ger- 
man trade. This bureau is attached to the German con- 
sulate at Shanghai, and has, I am informed, eight Ger- 
man and about twenty Chinese employes. Several of 
these employes are experts on commercial matters, sent 
out from Germany. They travel in all parts of the Em- 
pire, observing and inquiring into conditions. Their 
reports are made to the Shanghai bureau, where they are 
classified and compiled, for the information of the Gov- 
erment at Berlin and trade bodies in Germany. The sole 
business of this organization is to gather information about 
commercial conditions in China. It is associated with 
the consular service, but is entirely in addition to it, and 
has nothing to do with routine consular work. At present 
all this involves large expense for comparatively small 
results. Germany is looking to the future for returns. 

The logic of the situation points, however, to Japan 
as perhaps the most formidable rival American commerce 
will in the future have to meet in Asia. Japan's sit- 
uation differs from her competitors, in that to secure 
a market for her products on the continent and to be able 
to draw from Asia raw products to enable her to become 
an industrial nation are vital factors in her national pol- 
icy. Should she fail in this the national trade policy will 
fail. Germany, England and America could be totally 
deprived of a market in Asia without seriously im- 
pairing their national status: that is, they could still 
be powerful and prosperous. But without Asiatic trade 
Japan eventually will become a second-class nation, 
and her present dream of an Oriental comity under 
her leadership will fade. This means that Japan will 
make extraordinary exertions to push her interests in 



AMERICAN TRADE IN CHINA 345 

China. And she is going about it with an energy that 
promises a fair measure of success. The Japanese Gov- 
ernment is backing its subjects in commercial enterprises 
in China, and encouraging the promotion of Japanese 
trade through its subsidized steamship companies. Thou- 
sands of Japanese are emigrating to China. Shanghai 
and other treaty ports, where they were comparatively 
few before the war with Russia, now have large Japanese 
communities, and they are penetrating to all parts of the 
country, even into small towns and villages. In so do- 
ing they seem to pay no attention to treaty stipulations 
which forbid foreigners to engage in business outside treaty 
ports, but establish themselves wherever they like. Re- 
cently a representative of an American corporation which 
does a large business in China attempted to put out ad- 
vertising matter in an interior city, but the Taotai sent 
to order him to stop, which he did. Upon going about 
the city, he discovered eight Japanese shops open for 
business, and a Japanese post office. He promptly called 
the Taotai's attention to these circumstances, and insisted 
upon going on with his own work, which the Taotai, 
after some demur, permitted. The Taotai professed ig- 
norance that Japanese were in the city; which was, of 
course, an evasion. It seems that Japanese are able to 
arrange these matters with local officials, who agree to 
shoo other foreigners away. Japan also exercises diplo- 
matic pressure at Peking to secure such exclusive privi- 
leges. Japanese mining experts and commercial agents 
are to be seen throughout China, whose methods are 
similar to those of the Germans : except that some imme- 
diate move usually follows in their wake, such as estab- 
lishment of shops and Japanese settlements. Even when 
their presence is discovered by foreigners and complaints 
made that other nationals are denied similar privileges, 



346 THE FAR EASTERN QUESTION 

it is seldom that anything is done about it except in flagrant 
cases, so fearful Is Peking of irritating Japan. 

In connection with the position of American trade in 
China in comparison with competing nations, a condition 
exists which may In the future, conceivably, lead to com- 
plications by opening avenues for Invidious discrimina- 
tion. In fact, discrimination already exists, but not yet 
In sufficient magnitude to become an Issue. Inspection 
of a map of the Chinese Empire shows that all of the six 
great powers directly and potentially interested in the 
future of China, except America, have territory lying con- 
tiguous to her domain. Russia has the vast stretch 
of her Siberian frontier, with part of Mongolia and Man- 
churia also under her control. Japan possesses Korea, just 
across the Yalu river from China, and holds southern Man- 
churia as well. France has her Indo-Chinese frontier In 
the south, England has the frontiers of Burma and Tibet 
and Wel-hei-wel. Germany has the leased territory at 
Klao-chau Bay, where she has built the fine city of Tsing- 
tau as a terminus for the German railway Into the Interior. 
The Chinese Import customs tariff is collected only on 
sea-borne articles, and products coming across the land 
borders usually pay a lower rate, sometimes no duty at 
all. This seems so astonishing that I hesitated to believe 
it; but was convinced by the phrasing of a regulation 
defining the duties of custom officials, which says : " The 
revised tariff Is a maritime tariff and not to be enforced 
on the land frontier." There were until very recently 
no custom houses on the Siberian border. There are some 
on the Burma and Indo-China frontiers, where a reduced 
tariff Is paid on Imports, but the process Is susceptible of 
easy evasion. 

How this condition may in the future affect American 
trade Is obvious. In a short time all of America's com- 




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AMERICAN TRADE IN CHINA 347 

merclal rivals in China will control railways entering the 
Empire across a land frontier, connecting with sea ports 
outside its borders. Thus, goods landed in Burma will 
have an inlet into China across the frontier of Yunnan, 
and on into Sczechuen, the most fertile and densely popu- 
lated province In the Empire. France has an inlet through 
Kwangsl, where her railways eventually will be connected 
with the system which will cover south and central China. 
The Russian trans-Caspian road eventually will connect 
with the Belgian road in ShansI, and thus establish con- 
nections with the whole of the Empire. Japan has entry 
through Korea and Dalny; Germany through Tsingtau. 
American goods must come In through maritime ports over 
which the United States has not the slightest control. 
Trade with Russia across the Mongolian border, which 
always has been considerable. Is not hampered by tariff re- 
strictions, except likm. It Is known that merchandise en- 
ters through the French and British frontiers duty free, 
and no attempt Is made to collect a rate on these frontiers 
equal to that imposed at maritime ports. All great pow- 
ers, except America, thus have at least partial control of 
Inlets by which products may enter, and development of a 
complete railway system In China, a certainty of the near 
future, with possible Influence over railway tariffs In the 
hands of competitors who have land frontier Inlets, pres- 
ages a condition of disadvantage to American trade unless 
steps are taken to clear the situation. There Is plenty of 
work for American diplomacy In China. 

Factors In the struggle for trade In China, besides those 
already considered, are the foreign banks established 
there, most of which are directly associated with for- 
eign governments, and are convenient agencies to pro- 
mote national Interests. There are several British banks, 
among which the Hongkong and Shanghai Bank leads, 



348 THE FAR EASTERN QUESTION 

with twenty-five branches in the Far East. The Russo- 
Chinese bank has over forty branches in Asia and the 
Far East. The Yokohama Specie Bank has more than 
twenty branches in Asia. The Bank of Indo-China, with 
a score or so of branches, looks after French financial 
interests, and the German-Asiatic Bank does the same for 
Germany. The International Bank is supposed to be an 
American corporation, but its position is inferior to the 
other institutions mentioned, and it is in no sense directly 
associated with promotion of the national interests. 

Of perhaps greater importance to the development of 
American trade In China than the methods of competitors 
is the maintenance of equitable relations between the two 
countries. A bond of commercial sympathy already is 
established. Both countries are good customers of each 
other. Of what China now sells abroad, America con- 
sumes more than any other nation. Chinese officials are 
beginning to realize that China's exports must be increased 
or the drain of the balance of trade against her, now 
considerable, may be felt in her forthcoming industrial 
reorganization, and they are surveying the world for pros- 
pective markets. I find that generally they regard the 
United States as the more promising of these. Here lies 
America's opportunity. If Chinese trade with America 
can be brought to move naturally, as all trade will if 
permxitted, along the line of least resistance, which means 
in the direction of greater demand, the way to reciprocal 
development becomes easy. Obstacles to the promotion 
of a policy of commercial reciprocity between China and 
the United States are comparatively insignificant. 

The demand for foreign goods in China is growing 
every day. One cannot turn any way without observing 
evidences of the inclination of Chinese to consume foreign 
products. This is particularly noticeable in regard to 



AMERICAN TRADE IN CHINA 349 

food products. A few years ago wheat flour was almost 
unknown to the Chinese, and was an article of luxury. 
This latter condition is still true, but to a less extent than 
formerly, while to-day almost every Chinese wilL use 
flour if he can afford it. Street comestible vendors now 
offer various kinds of edibles made of wheat flour where 
a few years ago nothing of the kind was to be seen. Flour 
mills are being built in all parts of China, and the people 
are encouraged to cultivate wheat. Until recently the 
average Chinese thought that to put anything cold into 
the stomach was injurious. Now they freely consume 
ice cream and cold beverages. Among the wealthier class 
this disposition is more apparent, but even coolies pur- 
chase such luxuries whenever they can spare a little cash. 
Chinese show a growing inclination to eat in the foreign 
hotels and restaurants. In time China will be a market 
for many kinds of foreign products, especially those which 
can be brought within the purchasing ability of the masses. 
But before that day arrives, China herself will have en- 
tered into production of many of these products; in fact, 
this movement already is well under way. 

Although China at present is belligerently impotent, she 
possesses power of retaliation against foreign commerce 
in China, and has a weapon which can be directed against 
any article of foreign production. This weapon lies in 
the guild system of the Empire. It was the guild system 
that made the boycotts against America and Japan pos- 
sible. Both these boycotts originated in political, not 
\ commercial conditions, and were really detrimental to com- 
vmercial interests in China, yet so great is the cohesion of 
the guild system that their support was drawn to move- 
ments fundamentally unpopular and unprofitable. There 
is not a phase of commercial life in China that is not con- 
trolled by the guilds. Each great branch has its own or- 



350 THE FAR EASTERN QUESTION 

ganization, such as the Silk, Tea, Piece Goods, Tobacco, 
Flour, Oil, etc. Then there are the trades unions, an off- 
shoot of the greater guilds. Trades unions chiefly are 
composed of small retail dealers, and various artisan 
groups. The guilds have laws of their own, and Chinese 
courts frequently accept guild regulations as authoritative. 
The jurisdiction of the guilds Is very comprehensive, and 
practically extends to all commercial activities. Their fiat 
in business disputes or evasions is law from which there is 
no appeal in China. Even the Government is helpless to 
Interfere in matters directed by the guilds. In his work 
on Chinese commercial law and methods, Mr. T. R. Jurn- 
igan, formerly United States Consul-General at Shanghai, 
thus writes of the Influence of the guilds upon foreign 
trade : 

" It is not too positive to write, that it is within trie 
power of the guilds to Interfere with commercial Inter- 
course in China, to impair seriously the commercial rela- 
tions of western nations with China, and comparatively to 
drive from the trade marts of the Empire the foreign 
products now sold in those marts, or to make the demand 
for them so unremunerative as to partially destroy im- 
portation, while the central government, If It had the 
Inclination or the means, would scarcely have the courage 
to remxove the organized obstruction or to punish the 
obstructors." 

It Is not possible to doubt that whatever happens to 
the nation politically there Is a great commercial future 
ahead of China, and this Is not a time for Americans to 
be indifferent to it. The situation never before has been 
more critical, nor contained more powerful elements of 
unrest. Many serious problems confront the United 




u 



AMERICAN TRADE IN CHINA 351 

States concerning the development of its trade in the 
East, and a definite pohcy designed to advance and safe- 
guard it cannot too quickly be entered upon. 



CHAPTER XXVI 

CHINA AND THE UNITED STATES 

A Storm Center — America's Relation to the Future 
OF China — Some Aspects of This Question — Major and 
Minor Premises — The Pacific Ocean Powers — Their 
Comparative Rank Estimated — Factors Involved — Ma- 
terial Interests of the Nations — The Element of Ter- 
ritory — Riparian Rights — Commerce — The Position of 
America — The Disturbing Element — America's Efforts 
in China's Behalf — Attitude of the Powers — "What 
Will America Do ? " — Should the United States " Inter- 
fere " ? — Various Kinds of Interference — Phases of 
" Aggressiveness " — China's Need for Advice and Aid — 
America Cannot be Indifferent — Need for an Active 
Asiatic Policy. 

It is probable that historians of the rise of the United 
States as a world power will mark two major crises of 
American diplomacy. The first is that which determined 
its attitude toward the development of the western hem- 
isphere. The second well may be the formulation of a 
policy that definitely will delimit the fundamental rela- 
tion of the United States to the Far Eastern Question. 

The Washington Government must decide whether in 
the crisis which is approaching it will actively move to 
compel a satisfactory solution, or will permit American in- 
terests to continue to drift on the current of events; 
whether it will formulate its own policy or have one 
thrust upon it; whether it will lead or follow. For that 
the United States must have a Pacific Ocean policy cannot 

352 



CHINA AND THE UNITED STATES 353 

be doubted. American statesmen and people may shrink 
from participation in the Eastern Question, but it inevitably 
will intrude upon them; and it is bound up in the fate of 
China. This great Empire will be the storm center of 
the forthcoming diplomatic struggle and the scene of 
any international conflicts which failure of peaceful ad- 
justment will provoke. As the Monroe doctrine invokes 
the United States to interfere should stronger nations 
aggress upon Central and South American states, so may 
a strong Pacific policy invoke its aid to preserve China. 
That the proposition contains this possibility may be 
granted. 

Whether the United States shall adopt a strong eastern 
policy Involves numerous considerations, and the factors 
which apply to the proposition may be discriminated by 
their moral and material aspects. The major premise 
of the moral obligation of western nations In the case of 
China Is whether the Institutions and ethical standards 
of East or West shall shape the course of civilization 
there. Its minor premise is whether China and the Chi- 
nese shall be exploited for the chief advantage of foreign 
nations. The two premises are Interlocked and Interde- 
pendable, for sinister phases of the second may be ad- 
vanced under cover of the first; Indeed, such policies usu- 
ally assume this mask. 

However prominently moral aspects of this question 
may be kept to the fore in academic discussion, the origin 
of Influences which will give them practical effect must 
be sought In its material phases. To these the ethical 
arguments probably will be bent; In these the harmonies 
and conflicts of International interests will be found. In- 
ternationally regarded, material Interests of the various 
nations In the Pacific Ocean comprise the major elements 
of territory, riparian rights and commerce ; and in possible 



354 THE FAR EASTERN QUESTION 

and probable combinations of these elements the actual 
and prospective situations of nations may be determined. 

Of the greater nations only five now possess considerable 
territory and riparian rights in the Pacific Ocean. These 
are China, Japan, Russia, Great Britain and the United 
States. Estimated by extent of inhabited and developed 
territory in this region, China ranks first, America second, 
Japan third. Great Britain (including Australasia and 
Canada) fourth, Russia fifth. Estimated by riparian 
rights in the Pacific, America ranks first, Japan (including 
Korea) second, China third. Great Britain fourth, Russia 
fifth. France, Germany and Holland also possess some 
territory in the East, but it is inconsiderable by comparison 
with similar interests of the five powers mentioned. Ger- 
many's possessions are confined to a few Insignificant 
islands, as her leasehold on Kaio-chau eventually will ex- 
pire. France has a foothold in Annam, and Holland 
possesses Java, Sumatra, part of Borneo and the Celebes. 

As to trade, a calculation based on the foreign com- 
merce of China (which may serve as the most pertinent 
example at hand) during the years 1 902-1 907 shows that 
Great Britain ranks first; America second, Japan third, 
Germany fourth, Russia fifth. 

When the major factors are computed it Is apparent 
that of the five nations which may be regarded as having 
a first-class position In the Pacific the United States now 
Is entitled to first rank, with China second and Japan 
third. It Is probable that estimation of potential com- 
mercial progress In this part of the world, based upon 
natural development and a continuation of the present bal- 
ance of power, will In time augment the prominence of 
America. Assuming this. It will be to the advantage of 
the United States to preserve the existing status quo. 

No natural or social forces now threaten to disturb the 



CHINA AND THE UNITED STATES 355 

existing balance of power in the Pacific, except as political 
pressure, supported by military and naval strength, may 
be exerted to shift it. It is the direct and sometime sur- 
reptitious application of this pressure, and the presence in 
this international comity of a weak sister, that gives 
cause for apprehension. Were China's political and mili- 
tary strength on a parity with the other four great Pa- 
cific nations her situation would present no problem to-day; 
there ^would be no Far Eastern Question, or at least not 
one which may affect the political equilibrium of the 
world. So we find In the fate of China the beginning 
and end of this problem as It shapes Itself to-day. 

It Is only within the last decade, or since Japan's easy 
victory over her revealed the military weakness of China, 
that the Far Eastern Question became acutely Interesting 
to America. From the time when John Hay became 
Secretary of State our nation has played an important 
though unobtrusive part In eastern affairs. The Wash- 
ington Government early adopted the view that preserva- 
tion of China's territorial Integrity and political autonomy 
harmonizes with broader Interests of the United States, 
and It consistently has exerted its Influence In supporting 
Its thesis. Several times America has initiated Interna- 
tional action In China's favor; Indeed, It truthfully may 
be said that every Important proposal that was at once 
practical and sincere which during the last decade the 
powers have been Induced to accede to was promoted by the 
United States. The more Important of these moves fol- 
low: 

I. The Hay Agreement, acceded to by the powers In 
1899, by which the principle of China's pohtical integrity 
and the " open door " was formulated Into an International 
covenant. 



356 THE FAR EASTERN QUESTION 

2. The refusal of the United States to assent to the.j 
imposition, in 1901, of an oppressive indemnity upon 
China, which would have made her the fiscal vassal of 
foreign powers for an indefinite period. 

3. The action of the United States, in 1904, in inducing 
the belligerent powers, Russia and Japan, to confine hos- 
tilities to a clearly defined region, with a view to limit, the 
devastating results of war upon the Chinese, and to pre- 
vent the further embroilment of China. 

4. The action of President Roosevelt in using his in- 
fluence to terminate the war between Japan and Russia, 
and to secure the definite assent of those nations, in their 
treaty of peace, to the restoration of Manchuria to China 
and to the principle of the " open door." 

It is not going too far to say that it Is chiefly due to 
the Hay Agreement and the attitude of the United 
States that no nation in any treaty It has since made 
regarding eastern affairs has, whatever its designs may 
be, felt able to omit a reaffirmation of its principle, and 
so It has come about that every important power which 
is Interested in the eastern situation is on record in 
one or several conventions as favoring the maintenance 
of China's integrity and the preservation of the " open 
door." Recent events indicate that America has no inten- 
tion of abandoning her attitude. WlUiam Howard Taft 
reaffirmed it at Shanghai In 1907, coupled with a sympa- 
thetic reference to China's new national spirit. In Man- 
churia the United States consular representatives have 
declined to recognize Japanese and Russian administrative 
authority which overlaps China's sovereignty; and by an 
exchange of notes, in November, 1908, reaflirmatlon of 
the principle of the Hay doctrine was made by Japan and 
America. 



CHINA AND THE UNITED STATES 357 

It may be argued that if all interested nations are 
agreed in the premises of the Eastern Question, and have 
expressed their policies in formal notes and specific con- 
ventions with each other and China, a satisfactory course 
is assured. Unfortunately, however, the practical appli- 
cation of certain policies in Asia is now, as ever, running 
directly contrary to fundamental principles of the Hay 
Agreement. Instead of being relieved of apprehension 
of external aggression, and feeling free peacefully to ac- 
comphsh reform of her internal administration, China to- 
day is once more confronted with a situation which 
threatens her national existence; and the "open door" 
principle is being evaded and undermined. It is only a 
question of time until something must be done to prevent 
forces of disintegration from getting the upper hand. 

Under the circumstances, the question agitating diplo- 
matic circles in the East is not " What will China do? ", 
for everyone knows that China now can do little to secure 
herself, but " What will America do? " As the Monroe 
doctrine had no international virility until the world was 
convinced that the United States will back it with 
action, so will the Hay doctrine have none until the world 
is assured that America will enforce her poHcy in the 
East at least as actively as other nations now enforce 
theirs. In short, is the Hay doctrine merely an empty 
phrase, a convenient cloak for antagonistic ambitions and 
designs, or does it represent an American political idea 
which will upon occasion assume practical form? The 
Washington Government may before very long have to 
answer this question. 

There are indications, almost unmistakably intimated 
by its diplomatic attitude, that the Washington Govern- 
ment at present has no answer to this question ready. 
Opposed to the Hay doctrine is a theory that the United 



358 THE FAR EASTERN QUESTION 

States should sentimentally use its influence to preserve 
China, but should not take positive action if other na- 
tions pursue an opposite course; or should merely ob- 
serve events without tal<:ing part. This theory is em- 
bodied in phrases frequently repeated, that the United 
States should not be " aggressive " In China, and that it 
should not " interfere " in eastern affairs. 

I think I have demonstrated that based upon her moral 
and material relation to the Eastern Question, America has 
fully as much right to pursue an aggressive policy in Asia 
as has any other power, especially when any past inter- 
ference by her always has been advantageous to China as 
distinguished from Interference designed to wreck the 
Empire, and usually has been welcomed by China. It Is 
evident that " Interference " can assume many shapes. 
The seizure of Kiao-chau bay by Germany, the occupation 
of Manchuria and Mongolia by Russia and Japan repre- 
sent one kind of Interference. Diplomatic pressure, backed 
by military force, to prevent China from developing her 
own territory, of which the Fakumen railway Incident Is 
an example, Is a form of interference. The Hay Agree- 
ment, the so-called neutral border agreement, and Presi- 
dent Roosevelt's Intervention at Portsmouth also were 
Interferences with China's affairs. Whether a foreign 
nation Is justified In Interfering in China entirely depends 
upon what form such Interference takes, what are the 
reasons and objects of It, and the conditions under which 
it is urged or accorded. For Instance, Interference at 
the solicitation of China is different from Interference 
against her protest; Interference for her benefit Is different 
from Interference to Injure her; Interference In the Interest 
of peace and civilization is different from Interference 
calculated to cause war. So whether the United States 
should " interfere " in China altogether depends upon cir- 



CHINA AND THE UNITED STATES 359 

cumstances. In any event, it is certain that other nations 
now are actively interfering there, and probably will 
further encroach unless checked by external influence. 

As to " aggressiveness " in the East, here again it de- 
pends upon how the term is translated into action. The 
United States certainly should not be aggressive anywhere 
in international affairs in the sense of interfering where 
it Is not concerned, or upon inadequate grounds. In no 
part of the world is there such opportunity for felicitous 
aggressiveness on the part of America as Is presented in 
the case of China, or where It will be better received, for 
China is now Inclined to believe and easily may be con- 
vinced that America has no ambitions In Asia inconsistent 
with China's sovereignty or development of the Empire 
into a strong and virile nation. Desiring such a con- 
summation both on China's account and her own, having 
the assurance of all Interested nations that they are sim- 
ilarly Inclined, what legitimate objection can be made to 
an American policy calculated to accomplish this end, or 
to the active promotion of such a policy? 

The measure of practical scope of foreign policies in 
China must be sought in the condition of China herself, 
and this is profoundly interesting. Surrounded by ene- 
mies wearing the mask of friendship, and unable to turn 
without feeling the pressure of some hostile policy directed 
at her vitals, it might be expected that China's political 
deficiencies would be thrown into strong relief. Never 
before has the paradoxical combination of arrogance, ti- 
midity, self-satisfaction, astuteness, Ignorance and practical 
Incompetence which constitutes her administrative system, 
as It appears to some western eyes, stood out more plainly 
than now when she has such desperate need for different 
qualities. Internally China is backward, but her case is 
by no means hopeless. There does not exist a political 



36o THE FAR EASTERN QUESTION 

or social evil In China that cannot be corrected. It is, 
moreover, certain that Chinese statesmen at last realize 
that a practical scheme for reform must be pursued. In 
this endeavor they not only need time, but also the advice 
and' assistance of friendly western nations. 

The fact that many Chinese do not want this assistance 
and regard such proffers with keen suspicion and distrust 
should not deter nations animated by a candid spirit from 
urging it, even pressing it upon her. It should be re- 
membered that China has in the past sometimes acted 
upon foreign advice and suggestion only later to awake 
to the fact that she had been circumvented. Similar ad- 
vice was given to Japan when she needed It. Perry " in- 
terfered " at Mississippi Bay, and a monument erected 
by Japanese now commemorates his interference. In 
diplomatic affairs Japan has not yet entirely dispensed 
with western advice; at Portsmouth the Japanese com- 
missioners had Mr. Dennlson at their elbows. China 
sorely needs advisers like this, and she should be urged 
to employ them by some power whose motives she will 
not distrust. 

Hardly a month passes that the Chinese Government 
does not commit some error which might have been 
avoided by employment of competent and sincere foreign 
advisers. Had Chinese commissioners such men to advise 
them so many of China's important treaties would not now 
be susceptible of constructions favorable to other nations, 
or could not so easily be distorted to serve sinister pur- 
poses. China is trying to play the modern diplomatic 
game without fully understanding Its elements and rules, 
and so long as she persists in doing so she continually will 
be falling Into difficulties out of which she must be helped 
by friendly nations. In her disputes with other nations 
China frequently has the better position morally, but she 



CHINA AND THE UNITED STATES 361 

sometimes handles her case so Ineptly that she manages to 
get technically In the wrong before It goes very far, which 
gives powers that are so Inclined opportunity to impose 
upon and humiliate her. An irritating and sometimes dis- 
heartening feature of Chinese diplomacy is that when 
China gets into difficulty partly through her own igno- 
rance, she sometimes will try to wriggle out by evading 
her obligations, thus putting herself In the wrong. In 
this respect, China's position In the International comity 
may be compared to that of an incompetent lawyer whose 
mistakes embarrass the court and other attorneys as well 
as himself. 

In aiding China to acquire modern efficiency disinterest- 
edness, patience and firmness must be exercised. Real dis- 
interestedness might mean indifference; but sufficient in- 
terest In China's stability and prosperity to Induce activity 
in impelling her In the right direction, without being wholly 
selfish, Is the measure needed. It may be expected that 
China will in the years to come often try the patience even 
of disinterested friends almost to the limit of endurance, 
by procrastinating methods which seem to be inseparable 
from her administrative processes, but the attempt to help 
her should not be abandoned on this account. It may be 
said of China's slowness to adopt western political forms 
that while It Is irritating it is not actively injurious to other 
national interests. China may be slow to adopt, but she 
does not exert herself to warp or destroy. And there is 
no doubt that a genuine community of interests exists in 
the case of China and the United States. 

The political and commercial forces now operating In 
the East are steadily inclining China toward closer contact 
with America, and It requires only circumspect diplomatic 
activity for the United States to become the most influen- 
tial foreign power in the Empire. I am convinced that 



362 THE FAR EASTERN QUESTION 

the American legation at Peking is the most important 
diplomatic post which our Government supports to-day, 
and it should be raised to an embassy. It is one of the 
few places where there still is opportunity for constructive 
diplomacy. It is difficult to conceive how the United 
States Government and the American people can be indif- 
ferent to the situation of this nation of 430,000,000 souls, 
or unaffected by Its fate. No tremors need be felt about 
results of a more aggressive American policy In the East. 
The situation is such that the United States can assume 
leadership in the Pacific, if an energetic policy is adopted, 
for nations which are beheved to desire the disintegration 
of China are now crippled in their resources and involved 
In serious Internal complications. Conditions now are 
more favorable to peaceful adjustment than they ever may 
be again, and It Is probable that unless America does again 
Interfere In eastern affairs another great war will occur in 
a few years. The course of events intimates that If the 
" open door " is to be preserved, It can be accomplished 
only by direct intervention of the United States. This Is 
not a time for Indifference or hesitation, but the hour when 
a friendly hand properly may be extended to China for sup- 
port and guidance along a difficult path. 



CHAPTER XXVII 

CHINA AND THE UNITED STATES — Concluded 

Diplomatic Weather-vanes — The Root-Takahira Note 
— This " Agreement " Analyzed — Its Antecedents and 
Conditions Precedent — Its Relation to China — Dis- 
quieting Features — Japan's Apparent Objects — The 
American Viewpoint — Essence of This Incident — Ef- 
forts TO Prevent a Chinese-American Understanding — 
Genesis of These Efforts — International Jealousies 
Invoked — A Significant Incident — Visit of the Ameri- 
can Fleet to China — Opposing Intrigues — Part Played 
BY the American Minister to China — Diplomatic Inepti- 
tude — The Fleet at Amoy — Effects of This Incident. 

In moves and countermoves which attend progress of 
the great game of International politics, and the constantly 
shifting processes which mark the formulation and re- 
formulation of policies In the effort to adapt them to 
conditions In evolution, there appear from time to time 
diplomatic maneuvers that are important and Interesting 
more by reason of what they indirectly Intimate than what 
they actually express. To this class of diplomatic weather- 
vanes the exchange of notes between the Governments 
of Japan and the United States on November 30, 1908,^ 
belongs. V^hlle this communique ostensibly touches re- 
lations of the United States and Japan, It really, when 
examined, Is found to bear almost entirely on relations 
of these governments to China, which Induces considera- 
tion of It in this connection. 

1 Appendix M. 



364 THE FAR EASTERN QUESTION 

This "agreement" is indeed very significant; not es- 
pecially in what it says, but in what it may mean, and it ex- 
cited great interest throughout the world. That was 
shown by a chorus of comment in other countries, and 
by the efforts of commentators to extract some definite 
conclusions from its terms. Americans like to think, and 
probably most of us believe that diplomatic methods of 
our Government have gotten away from the idea of which 
the old diplomatic canon that treaties and agreements 
between nations should be drafted to conceal their mean- 
ing was the expression. But, taking it on its face, this 
memorandum is a fair example of the good old formula. 
It obviously does not require treatment such as was com- 
manded by Napoleon, who when informed by his min- 
isters that a proposed treaty contained nothing ambiguous, 
is alleged to have said: " Then put something in at once." 
What any such instrument implies always must be deduced 
from circumstances, and in this instance just appreciation 
may only be derived from the conditions which gave birth 
to the modern relations between Japan and America, the 
sequence of events by which they have developed, and 
the situation of China. 

The terms of the " agreement " which is embodied in 
the exchange of notes between Mr. Root and Baron Taka- 
hira follow: 

1. It is the wish of the two Governments to encourage 
the free and peaceful development of their commerce on 
the Pacific Ocean. 

2. The policy of both Governments, uninfluenced by 
any aggressive tendencies, is directed to the maintenance 
of the existing status quo in the region above mentioned, 
and to the defense of the principle of equal opportunity 
for commerce and industry in China. 



CHINA AND THE UNITED STATES 365 

3. They are accordingly firmly resolved reciprocally to 
respect the territorial possessions belonging to each other 
in said region. 

4. They are also determined to preserve the common 
interests of all powers in China by supporting by all pacific 
means at their disposal the independence and integrity of 
China and the principle of equal opportunity for commerce 
and industry of all nations in that Empire. 

5. Should any event occur threatening the status quo 
as above described or the principle of equal opportunity 
as above defined, it remains for the two Governments to 
communicate with each other in order to arrive at an 
understanding as to what measures they may consider it 
useful to take. 

The first article is a platitudinous generalization en- 
tirely devoid of specific meaning in this connection, since 
it merely expresses a sentiment common to all progressive 
nations. 

The second article contains a hint of something definite. 
The two powers declare their policies to be maintenance 
of the " existing status quo " in the Pacific Ocean and 
the " principle of equal opportunity for commerce and 
industry in China." What status quo Is meant? Does it 
include the present quasi-occupation and domination by 
Japan and Russia of Manchuria? It would seem so, on 
its face. It is rather difficult to believe that the govern- 
ments mean by " existing status quo " merely territorial 
possessions of Japan and the United States, since there is in 
neither the conditions precedent nor in common presump- 
tion ground for any very definite suspicion that either na- 
tion has designs upon territory of the other. Mention in 
this clause of China seems, in conjunction with other cir- 
cumstances, to limit its meaning to China's territory, and no 



366 THE FAR EASTERN QUESTION 

other intelligent construction can be placed upon it. Yet 
are we to believe that the United States has been induced 
to acquiesce in the present status quo in Manchuria, which 
is part of China? Is the principle of equal opportunity 
for commerce and industry which has since 1904 been 
applied in Manchuria and Korea to be taken as a model 
in interpreting the meaning of this clause? This ques- 
tion is certain to occur to American trading interests in 
China, and to the Peking Government. Such an infer- 
ence may be deduced from its phraseology. 

The third clause confirms the impression that tei^ritorial 
possessions of China alone were meant to be included in 
the scope of the second clause, for it specifically refers to 
the territorial possessions " in said region " (the Pacific) 
of America and Japan. If there is any material quid pro 
quo inherent to the United States in the agreement it is 
contained in this clause, since it is apparent that the 
Philippines were in mind when it was drafted. I suppose 
not even the wildest jingo in Japan or elsewhere has 
conceived the idea of American encroachment upon terri- 
torial possessions of Japan, and even if such a mad ambi- 
tion possessed American statesmanship Japan would need 
no other security against it than that provided by her own 
resources. This is equally true of territorial possessions 
of the United States except, perhaps, those which lie in 
the Far East. This clause chiefly is interesting because 
of its tentative recognition of designs which Japan has. 
In the past, been suspected of having harbored. 

The fourth clause is to a considerable extent a repetition 
of the second, with the significant addition that the govern- 
ments announce their intention to support " by pacific 
means " the independence and integrity of China. Its 
meaning would be clearer if, in construing it in conjunction 
with the second clause, we were sure what status quo 



CHINA AND THE UNITED STATES 367 

is to be maintained. If the existing status quo in Man- 
ciiuria is included, then the form of independence and in- 
tegrity which is to be favored for China logically is that 
now obtaining in her northern provinces; a condition, it 
may incidentally be said, not at all like the independence 
and integrity which China wants to preserve, and which ac- 
cords with western ideas of this state. 

The fifth clause appears to be somewhat superfluous 
even in this vague memorandum, since thereby the 
governments merely agree to conduct their relations ac- 
cording to usage of civilized nations. However, as this 
is the only definite thing which they agree to do in the 
so-called " agreement," it probably is not amiss. 

This brief analysis of the Root-Takahira communique 
rather conclusively demonstrates, I think, that whatever 
significance it may have as bearing upon that greatest 
of present-day international issues — the Far Eastern Ques- 
tion — cannot be found in the published text. It there- 
fore follows that any importance which it has — and 
apparently it is agreed that it has importance — must be 
sought in the collateral circumstances and conditions 
whence it has sprung, and those which will, in turn, serve 
to illustrate any practical demonstration of its effectiveness 
in securing its ostensible objects. 

The modern phase of Japanese-American relations, of 
which this exchange of views is the latest official expres- 
sion, already has been reviewed. America's eastern policy 
has undergone no outward change either in principle or 
practice since formulation of the Hay Agreement, to 
which Japan assented. The basic principles of the Hay 
Agreement, I will repeat here, are assurance of the inde- 
pendence and integrity of China, and the "open door" 
for foreign commerce and industry there. Unless there 
has been an alteration of the attitude or practice of one or 



368 THE FAR EASTERN QUESTION 

both of the governments there would now be no reason for 
a re-statement of views. It Is not, so far as I know, al- 
leged in any quarter that the United States has shifted its 
position in regard to China since 1899. It seems to fol- 
low, then, that the policy of Japan has provided the causes 
which led to re-examination of the situation and, conse- 
quently, a mutual re-statement of positions. 

There is no doubt that in course of the prolonged 
Interchange of diplomatic views between the United States 
and Japan during 1906—8 It was intimated that the 
situation of American Interests In Manchuria and Korea 
Is not satisfactory, and the attitude of America toward 
eastern affairs manifestly stiffened. At Tokyo and Shang- 
hai Mr. Taft, on his trip around the world, spoke plainly, 
if with proper suavity. Suddenly throughout the East 
came a feeling, which permeated all classes of natives 
and foreigners, that America Intended to take a more 
decided stand. I was In the Far East during almost the 
whole of this period, was In Japan when the so-called 
Japan-American situation and the ministerial crisis of 
1908 were at a focus, and I was able to observe the 
course of events there at close range. It was evident by 
the beginning of the summer of 1908 that the Tokyo 
Government felt It necessary at least outwardly to mod- 
ify Its continental policy, and the first essential condi- 
tion was a rapprochement with the United States suffi- 
ciently spectacular to attract worldwide attention. In 
order to accomplish this without appearing to act un- 
der pressure some haste was required. China's Inten- 
tion officially to represent to America her version of the 
situation In Manchuria was taking practical shape, and 
His Excellency Tang Shao-yi presumably had been 
entrusted with this delicate mission. It was suspected in 
Tokyo, moreover, that China's plaint would not fall upon 



CHINA AND THE UNITED STATES 369 

deaf ears at Washington. Japan was not In a position to 
resist strong pressure applied to her Asiatic policy as 
demonstrated In Manchuria and Korea, so she prepared 
to side-step as gracefully as possible. Something must be 
done; and the Root-Takahira agreement appears to be 
the answer. It may be significant that It was announced 
from Tokyo simultaneously with the arrival of a special 
Chinese embassy, headed by Tang Shao-yi, at San Fran- 
cisco; at any rate, the coincidence is interesting; as also Is, 
in a similar degree, the fact that the American fleet sailed 
from Manila on its return voyage to the Atlantic on the 
day the agreement was published. 

The chief results which Japan apparently has sought 
to bring about in reiterating her position may be summed 
as follows : 

1. To restore her naval superiority In the Pacific by 
inducing the return of the American fleet to Atlantic 
waters. 

2. To restore her credit abroad, which has been seri- 
ously undermined by the Impression that her relations with 
the United States are strained. 

3. To allay disturbing rumors which her quasl-rup- 
ture with America had put into circulation, which ad- 
versely affected her prestige, and which hampered her 
Asiatic policy by subjecting It to critical scrutiny. 

4. To check China's effort to come to closer under- 
standing with the United States, which must, if successful, 
tend to enhance China's Importance in eastern affairs and 
by comparison, to depreciate Japan's Influence. 

5. By causing belligerent discussion in connection with 
Japan's continental policy to subside, to be able to increase 
her military and naval strength without attracting especial 
attention and comment. 



370 THE FAR EASTERN QUESTION 

The first of these objects has been accomplished. The 
second, third and fifth objects probably have been secured 
in some measure, but wl^ether Japan will be able to reap 
practical advantage by thus repeating her renunciation of 
an aggressive policy in Asia will depend upon future events. 
If Japan continues to talk one way and act another, as she 
has done in the past regarding her policy in China and 
Korea, she will again cause a revulsion of sentiment in 
the West. It reasonably may be presumed, however, that 
she has insured herself a breathing spell, during which she 
will be credited with pacific intentions by popular opin- 
ion in western countries. That this new agreement will, 
when Japanese reflect upon it, give little satisfaction in 
Japan is certain, although the Government organs uphold 
it for the moment. In fact, the note does not refer to 
issues which have to be adjusted between the two na- 
tions, and this is likely from time to time to be made the 
subject of criticism by opposition in the Diet. 

Japan's desire to interpose obstacles to a better and 
more sympathetic understanding between China and the 
United States, which I have included among her objects 
in this re-statement of her fealty to the " open door " and 
" integrity of China " doctrines, may or may not be suc- 
cessful; but already it is evident that she has scored a 
point. The ambiguity concerning the status quo which the 
powers pledge themselves to support is certain to excite 
apprehension at Peking owing to its similarity to clauses 
in agreements between Japan and other nations, and which 
China regards as purely perfunctory expressions. In- 
deed, unofficial expressions from Peking have intimated 
that the Root-Takahira agreement caused a feeling of 
uneasiness there, where Inevitably it will raise a conjecture 
whether Japan has induced the United States to assent to 
continuation of her position in Manchuria. To the ex- 



CHINA AND THE UNITED STATES 371 

tent that this agreement, and comment upon It by the 
press of the world, may create this idea in China, just to 
that extent it will have served Japan's ends by injecting 
suspicion tinged, perhaps, with distrust on one side, into 
the relations of China and America. I do not entertain 
the theory that America has assented to the present status 
quo in Manchuria; and the Washington Government no 
doubt will convey proper assurances to China through 
diplomatic channels that it has no such Intent. 

It remains to inquire what were the objects of the 
Washington Government in making this move, and what 
benefits, if any. It has secured. It may be assumed by 
some that the chief object of the United States is to safe- 
guard the Philippines, but reflection disposes of this theory. 
It is perfectly clear that if Japan and America ever fall out, 
whether about the fate of China or another Issue, no 
treaty between them, much less a vague interchange of 
v^Iews, will prevent Japan from attacking American pos- 
sessions wherever she can. Recognizing this, the objects 
of America must be sought elsewhere, and they may be 
enumerated as follows : 

(a) Again pointedly to call to the attention of the 
tvorld, and especially to the people of the United States, 
that the Government feels that America has a funda- 
mental interest in the eastern situation, especially in the 
fate and welfare of China. 

(b) To serve notice to the powers that the attitude 
Df the United States concerning the Far East has under- 
gone no alteration or modification since the promulgation 
Df the Hay Agreement; In other words, that the United 
States does not recognize results of the Russo-Japanese 
5var as affording reason to revise Its attitude. 

(c) To Intimate again to the powers that the United 



372 THE FAR EASTERN QUESTION 

States intends to take an active part in influencing the 
solution of the Far Eastern Question, and that its views 
and wishes should be considered in any action which af- 
fects the fate of China, or the balance of power in the 
Pacific Ocean. 

Here, then, we find the real meat in this so-called agree- 
ment with Japan, if it contains anything substantial. It is 
important not in what it says, or in that it happens to be 
communicated to Japan (although this is quite interest- 
ing) , but because it is addressed to the world. Interest 
manifested by the powers is, therefore, amply justified; 
for regarded in this light this seemingly innocuous coup- 
munique becomes a state paper of significance, which 
will, if lived up to, influence the fate of nations. 
I think that the Washington Government had in mind, 
in considering probable results of this diplomatic move, 
the necessity to create among Americans an intelli- 
gent public opinion about eastern affairs; to awaken them 
to clearer perception of our present position among na- 
tions, and to active consciousness of the situation of our 
nation in its relation to the world. If it contributes to 
such a result it is worth while. It may be that the consti- 
tutional function of the Senate to concur in ratification of 
treaties with foreign nations prevented the State Depart- 
ment from giving this instrument more specific form. 

Thoughtful Americans should not, however, permit 
satisfaction at whatever pacific assurances attend this in- 
cident to obscure certain possibilities. It hardly is nec- 
essary to say that this agreement, in Itself, does not 
" assure peace In the Pacific," as shallow criticism hast- 
ened to assert. It assures only that hereafter the United 
States will endeavor to exert greater Influence In eastern 
affairs. If our activities In the East are supported by suffi- 



CHINA AND THE UNITED STATES 373 

cient material force to give them practical effect if occasion 
requires, and only under these conditions, then can Amer- 
ica's influence make for peace in that part of the world. 
Nothing written on a piece of paper will assure peace any- 
where; only acts applied to specific conditions can ac- 
complish this. Actual conditions in the East have not 
been altered by this exchange of notes. Disturbing factors 
continue to operate. It may be presumed that the Wash- 
ington Government understands this ; and notwithstanding 
this spectacular resumption of an entente cordiale with 
Japan, we doubtless will hear about frequent launching of 
new battleships in both countries, and fortification of 
America's outposts in the Pacific will not be abandoned. 
The uneasiness of other foreign interests in China which 
is caused by China's present disposition to lean toward 
America, which certain manifestations of Japan's desire to 
have a dramatic rapprochement with the United States 
illustrate, already has found expression in various ways. 
An interesting example is the attempt, partly successful, to 
make the itinerary of the American battleship fleet in the 
Pacific take a color which was humiliating to China. 
When the fleet visited Amoy some phases of its reception 
by China were made the subject of unpleasant comment in 
the Japanese and western press, because of an alleged luke- 
warm attitude by Chinese. In order to comprehend the 
seemingly peculiar attitude of the Chinese people and the 
Peking Government toward the visit of our fleet it is nec- 
essary to review its antecedents. It should be understood 
that certain elements associated with China, but not of her 
in a national sense, were opposed to this friendly demon- 
stration, and exerted themselves to prevent it; or, failing 
this, to reduce some possible effects of it to a minimum, 
and to give the incident on the whole a (to them) desired 
international color. These hostile elements may be di- 



374 THE FAR EASTERN QUESTION 

vided into two general classes: (a) The Japanese in- 
fluence, and (b) European influence (including British). 

Japanese influence in China is both actual, and tenta- 
tive or potential. Japan's actual influence rests upon her 
occupation of southern Manchuria, her commercial and 
vested interests within the Empire, and her army and navy, 
which Orientals have been induced to regard as equal or 
superior to those of any western power. Her tentative 
or potential influence turns upon fundamental relations 
of the two nations, and will eventually be determined by 
their comparative destiny. It is obvious that should 
China, through regeneration, become the greater Oriental 
nation, Japan's prestige and influence in international af- 
fairs, and especially upon the continent of Asia, will di- 
minish by comparison. It is a primary object of Japan's 
foreign policy to prevent such a consummation. The 
present critical relations of Japan and China also bear 
directly on this matter. There are a number of serious 
diplomatic issues between them, chiefly arising out of Jap- 
anese occupation of Manchuria. Japan now has a great 
advantage In conducting negotiations owing to her mili- 
tary and naval superiority. The belief, which is now gen- 
eral among Chinese, especially the middle and lower 
classes, that the Japanese navy Is master of the Pacific, 
represents a distinct moral asset for Japan under existing 
circumstances, and it is a factor which Japanese statesmen 
do not wish to have disturbed. The effect that a visit 
to China of a foreign fleet which apparently is superior 
to the navy of Japan may have upon Japanese Influence 
in China is apparent. 

The motives which impelled other foreign influences in 
China to oppose a visit by the American fleet are complex, 
through having sprung from partly diverse points of view, 
but they have a common theorem which provides a certain 



CHINA AND THE UNITED STATES 375 

unity. The situation of foreigners and foreign inter- 
ests in China to some extent now rests upon the power and 
disposition of foreign nations to apply pressure upon China 
amounting, if need be, to actual coercion; which position 
is unofficially fortified by maintenance among foreign resi- 
dents in China of an assumed superiority to Chinese in 
business and social relations with them, and officially by 
a condescending attitude in diplomatic aftairs. This gen- 
eral condition has existed for so long that it has come to 
be accepted by many foreign residents, and by some gov- 
ernments, as being of the eternal fitness of things, and 
many inferences are deduced from it, among which is a 
professed belief that if it is ever modified or abridged 
the position of foreigners and foreign interests in China 
will become disadvantageous and insecure. Thus many 
foreigners in China, and no doubt some governments as 
well, regard with uneasiness the reform movement, and 
the ephemeral manifestations of anti-foreign spirit which 
attend it in its nascent stages. 

The disposition of the United States to befriend in a 
practical way China's new aspirations, as voiced by Mr. 
Taft at Shanghai, in October, 1908, attracted the notice t q o'^ 
of other foreign interests in China?" Mr. Taft then said: 

" The United States and others who sincerely favor the 
open door policy will, if they are wise, not only wel- 
come, but will encourage this great Chinese Empire to 
take long steps in administrative and governmental reform, 
in the development of her natural resources and the 
improvement of the welfare of her people. In this way 
she will add great strength to her position as a self re- 
specting government, may resist all possible foreign ag- 
gression seeking undue, exclusive or proprietary privileges 
in her territory, and without foreign aid enforce an open 



376 THE FAR EASTERN QUESTION 

door policy of equal opportunity to all. I am not one of 
those who view with alarm the effect of the growth of 
China with her teeming millions into a great industrial 
empire. I believe that this instead of injuring foreign 
trade with China would greatly increase it, and while it 
might change its character in some respects, it would not 
diminish its profit. A trade which depends for its profit 
on the backwardness of a people in developing their own 
resources and upon their inability to value at the proper 
relative prices that which they have to sell and that which 
they have to buy is not one which can be counted upon as 
stable or permanent. 

" For the reasons I have given, it does not seem to me 
that the cry of ' China for. the Chinese' should frighten 
anyone. All that is meant by that is that China should 
devote her energies to the development of her immense 
resources, to the elevation of her industrious people, to 
the enlargement of her trade and to the administrative re- 
form of the Empire as a great national government. 
Changes of this kind would only increase our trade with 
her. Our greatest export trade is with the countries most 
advanced In business methods and In the development of 
their particular resources. In the Philippines we have 
learned that the policy which is best for the Filipinos Is 
best In the long run for the countries who would do busi- 
ness with the Islands." 

Within a month after Mr. Taft thus spoke In the ; 
presence of a gathering jointly composed of foreigners and 
Chinese his words, or some Interpretation of their mean- 
ing, was transmitted, by newspapers and by methods used 
wherever publicity Is limited, throughout China. An4' 
they were good hearing to Chinese of all classes. It wassj 



CHINA AND THE UNITED STATES 377 

the first distinct word of encouragement, coming from an 
elevated official source, which the West has vouchsafed to 
the new aspirations of China, and it brought an immediate 
sentimental response. But many foreigners in China re- 
gard it as heresy of the rankest sort. Its effect in favor of 
American interests in the East was noted, which had a 
tendency to excite jealousy in some quarters. Mr. Taft's 
speech was received, at first, with cautious approval or 
noncommittal reserve by the foreign press in the East; 
but after he had departed influential segments in the for- 
eign community quietly began to depreciate it, as its 
possible effects were estimated from the angle which I 
have mentioned. It, however, had the immediate result, 
by appealing to their patriotic instinct, of causing Ameri- 
cans in China to get together to advance the national in- 
terests. 

This was the situation when the American fleet started 
on its journey to the Pacific, and it became known that it 
probably would visit the Far East. American commercial 
interests in China perceived the opportunity which was'- 
thus presented, and a plan was broached to induce some 
prominent member of the Washington Government to 
come to China coincident with a visit of the fleet, and to 
make the joint event the occasion of a great friendly dem- 
onstration. Important Chinese officials were privately 
consulted, and expressed approval of the plan. While 
the project was in this nebulous state it came to the 
knowledge of the British consulate at Shanghai, and was 
by it communicated to the British legation at Peking. 
Here conjecture must be invoked to some extent, since 
positive information is lacking; but the matter became 
known at Tokyo immediately afterward, and an invita- 
tion for the fleet to visit Japan was given, thus forestalling 
similar action by China. Japan's invitation was an- 



37B THE FAR EASTERN QUESTION 

nounced one day before that of China, making it appear 
that China's action was suggested by that of Japan, and 
was a perfunctory reflex of it, whereas the opposite is more 
nearly true. 

Some circumstances which attended the progress of this 
Incident, from the time the Invitations of the Japanese 
and Chinese Governments were published, are significant 
when reviewed In perspective. When the announcement 
was made W. W. Rockhill, the American minister to 
China, was sojourning In Japan, where he had ctopped 
while traveling from Washington to Peking on his return 
from a vacation. Mr. Rockhill proceeded to Shanghai, 
where he arrived in April, 1908. In this connection It 
may be mentioned that Mr. Rockhill has long been asso- 
ciated with events in the East, and has formed a consid- 
erable acquaintance there. Among these is the Peking 
correspondent of a prominent British newspaper, the tra- 
ditional relation of which to the British Government is well 
understood. It is believed by many persons in China that 
this journalist provides Mr. Rockhill with many of his 
political views about eastern affairs; indeed, the corre- 
spondent is frequently referred to, since Mr. Rockhlll's 
incumbency, as the " real American minister." Prior to 
the arrival of Mr. Rockhill at Shanghai a movement to 
prevent, if possible, the visit of the American fleet to 
China, or at least to circumscribe and limit Its effects, was 
afoot. The sentiment which provided the incentive of 
this movement did not, except guardedly, seek expression 
through publicity, although it controlled many channels; 
but sought to accomplish its ends by quieter and less direct 
methods. 

Meanwhile, the plan to give extraordinary eclat to the 
proposed visit was taking shape. The Peking Govern- 
ment seemed especially to be favorable to the project. 



CHINA AND THE UNITED STATES 379 

Just before Mr. Rockhill arrived in China, and when it 
was beheved that the United States would send the entire 
fleet, I discussed the matter with Yuan Shih K'ai, Tang 
Shao-yi and other prominent Chinese officials, all of whom 
expressed pleasure at the prospect of entertaining the fleet. 
Some of them suggested that while many foreign fleets 
have in the past visited China, this is the first time one 
was voluntarily invited, and they were disposed to hail 
the occasion as marking a new era in China's foreign rela- 
tions. It was planned to invite the Admiral and his 
staff to Peking, where they would have been received by 
the Emperor. It then was assumed that Shanghai would 
be the port visited, as that city was the practically unan- 
imous selection of the American element, and was accepta- 
ble to the Chinese. The advantages of Shanghai over 
other ports are great. It Is the commercial and financial 
heart of the Empire, the focus of all lines of communica- 
tion in the East, and is more generally accessible from all 
parts of the Interior than any other city. It is true that 
large ships are compelled to anchor at Wusung, In the 
mouth of the Ylang-tse river, some twelve miles from the 
city of Shanghai; but Wusung may be reached by both 
railway and water, and is directly In the path of all river 
and marine traffic. Had the fleet gone to Shanghai it 
would have been seen by millions of people. Hundreds 
of ships, launches and small water craft were available 
for sightseers, and scores of them would have been char- 
tered for this purpose. It was desired to make the re- 
ception to the fleet, apart from official functions, an Inter- 
national affair. In which all elements of the foreign com- 
munity would participate. Residents of Shanghai, both 
foreign and Chinese, recognized the pecuniary advantage 
to the city of such a function, and there was a disposition 
to reap this benefit. 



38o THE FAR EASTERN QUESTION 

At this point, however, international politics was in- 
jected into the affair by the influences which were averse 
to having the fleet come to China. Incentive for this 
opposition undoubtedly sprung from foreign official 
sources, but private means to promote it were used. The 
arguments employed may be summed as follows: That 
the meaning of the visit would be misunderstood by the 
Chinese people and Government and might, by stimulat- 
ing patriotic impulses which are beginning to stir among 
Chinese, tend to embroil the Government with other pow- 
ers (Japan) ; that Chinese would interpret such a visit 
as recognizing the equality of the Empire with western 
powers, which would tend to undermine the position of 
foreigners In China. These were arguments openly ad- 
vanced. 

Arguments privately used to create among other for- 
eign interests a solidarity antagonistic to the visit were : 
That such an affair would tend to exalt the United States 
in Chinese eyes to the comparative disadvantage of other 
foreign nations, and give extraordinary stimulus to Amer- 
can influence ; that the design of the United States was to 
undermine peculiar advantages now enjoyed by other for- 
eign interests, and to promote American Interests at their 
expense; that a visit of an American fleet to a Chinese 
port constitutes tentative infringement on " spheres of In- 
fluence " claimed by other foreign powers. This latter 
argument was particularly effective In respect to Shanghai, 
which is In the so-called British " sphere," and where Brit- 
ish Influence predominates. Japan had a special motive 
In trying to prevent or curtail a visit of the fleet to China, 
for if this could be accomplished the moral effect. In 
Oriental eyes, of Its visit to Japan would be accentuated. 
All these arguments, in some measure, were quietly used; 
but It is doubtful if they could have succeeded in baulking 



I 



CHINA AND THE UNITED STATES 381 

the plans of the American element and the Chinese had 
they not secured the support, upon his arrival, of the 
American minister. 

There may be no direct connection between Mr, Rock- 
hill's subsequent actions and certain conferences which he 
is reported to have held, soon after he reached Shanghai, 
with representatives of British interests ; but these, coupled 
with the fact that he had just come from Tokyo, were 
regarded as being significant. This relation is partly con- 
jecture; but some facts are well established. Mr. Rock- 
hill quickly let It become known to official and unofficial 
American circles that he disapproved of any and all plans 
calculated to bring the American fleet to China, and par- 
ticularly to Shanghai. People In the United States can 
hardly understand, unless they have resided in countries 
where extra-territoriality obtains, the weight that is at- 
tached to views of diplomatic representatives of a nation 
in matters like this. As soon as Mr. Rockhlll's attitude 
became known, as it quickly was, it put effectual quietus 
upon the movement to bring the fleet to Shanghai. The 
American Association of China, which naturally would 
have taken' the lead, associated with the American Consul- 
General, In promoting the affair, became divided in opinion 
and lost enthusiasm. Other elements — Chinese and for- 
eign — promptly and inevitably took their cue from Mr. 
Rockhlll's reported attitude. As to other foreign inter- 
ests, they could then have adopted no other course, no 
matter what their desires might have been. Plans to form 
an International business men's reception committee died 
aborning. A British, French, German or Japanese hong, 
on being approached, would reply : 

" We would be delighted to join in receiving the Amer- 
ican fleet; In fact, we very much wish It to come to Shang- 
hai — but we understand that the American minister has 



382 THE FAR EASTERN QUESTION 

expressed disapproval, and of course that ties our hands; 
you see? " 

The effect upon Chinese was even more dampening. It 
had been planned for the guilds to take a prominent part 
in welcoming the fleet, and a report that it was coming 
had already permeated the whole Empire, creating a sen- 
timent which was as near to enthusiasm as Orientals are, 
perhaps, capable of showing. Following the announce- 
ment that the " boxer " indemnity would be forgiven by 
the United States, it caused a desire among Chinese of all 
classes to reciprocate, and the proposed visit of the fleet 
provided an opportunity. Mr. Rockhill left Shanghai 
after a short stay and proceeded to Peking, where news of 
his action had preceded him. One of his first acts after 
reaching Peking was to cable the State Department advis- 
ing against sending the fleet to China. It is probable that 
almost before this message was delivered it was being dis- 
cussed in the Wai-wu-pu, whence it quickly percolated 
throughout Chinese officialdom. 

Consider, now, the position of the Peking Government. 
It had invited the American fleet to visit China, and un- 
derstood that the invitation would be accepted. Prelim- 
inary correspondence with the Washington Government 
had been carried on during the absence of the American 
minister from Peking. Now, upon arriving to resume his 
duties, instead of lending his support, he set to work to 
block the project, and on grounds which could not be other 
than intensely humiliating to China. Yet the Peking Gov- 
ernment could not gracefully retract its invitation; it must 
await action at Washington; but its attitude toward the 
fleet's visit became, from that moment, purely perfunctory. 
It could not withdraw; and it was left in a state of uncer- 
tainty. Foreseeing possible humiliation in the eyes of the 
world, and consequent loss of prestige in China, the Peking 



CHINA AND THE UNITED STATES 383 

Government had only one rational course open — to pro- 
ceed with the affair in a way so it might " save its face." 
A little later it was announced that the fleet would visit 
Amoy, but this was coupled with the news that only half 
of it would come, commanded by a junior Admiral. I 
was in Shanghai, having come from Peking by way of 
Hankow, when this announcement was confirmed, and on 
the following day a Chinese who has been to America, 
who was an interested auditor when Mr. Taft made his 
Shanghai speech, and who is prominent In the guild or- 
ganizations, remarked to me : 

" How can this action of your Government be recon- 
ciled with Mr. Taft's assurance of its friendship to 
China?" 

Within a month afterward It was being repeated 
throughout China : " A Number two fleet and a Number 
two Admiral are coming to China " : which usually was 
coupled with the statement that a Number one fleet and 
Number one Admiral were going to Japan. When this 
became generally understood popular enthusiasm about the 
Incident subsided. With the selection of Amoy, a com- 
paratively remote and Inaccessible port where cholera Is 
seldom absent, which would preclude extensive participa- 
tion of Chinese, and the reduction of the fleet, the Peking 
Government knew that interests which desire to keep China 
In an inferior position had triumphed by Inducing the 
Washington Government to accept their view. From 
then on there was no further thought of Inviting the 
Admiral and his staff to Peking. If America regarded 
the Incident as of secondary Importance, then Peking also 
would adopt this attitude. 

The happenings at Amoy, therefore, might have been 
anticipated, and professed surprise at failure of the 
Chinese to enthuse and at the obviously perfunctory char- 



384 THE FAR EASTERN QUESTION 

acter of official functions which attended the stay of the 
fleet there betrays a lack of information of factors and 
influences which attended the incident. One curiously 
perverse conclusion which was by some drawn from the 
failure of the Peking official press to make much of the 
visit is that it illustrates the ignorance and backwardness of 
the Chinese Government; whereas, on the contrary, it is 
evidence of dignity and self-respect; of understanding, not 
ignorance of the amenities of the function. One could 
hardly expect the Chinese Government to emphasize, in its 
own appreciation of the visit, the condescending spirit 
which apparently, on the part of the United States, per- 
vaded the affair. China's attitude and actions were quite 
correct officially, and she justly cannot be blamed for refus- 
ing to become enthusiastic over an incident which obviously 
assigned to her an inferior position in comparison with her 
Oriental neighbor and rival. From what might have 
been a remarkable demonstration, conducive of encourage- 
ment to China and advantage to American interests there, 
the visit of our fleet degenerated to a perfunctory display of 
force; and even this aspect lost effectiveness by reduction 
of the fleet. 

In respect to China, the impressions which resulted 
from thw visit appear to be: (a) it again has been borne 
in upon China that she must not aspire to equal treatment 
by the powers until she attains military and naval effi- 
ciency; (b) results of Mr. Taft's visit and the return of 
the " boxer ^' indemnity have been modified; (c) it has 
been intimated to China that America regards relations 
with her as being less important than relations with Japan ; 
(d) in some quarters, especially in the Orient, the infer- 
ence will be drawn that America adopted this attitude to- 
ward China because she was afraid of incurring the dis- 
pleasure of Japan. In respect to the world, these im^ 



CHINA AND THE UNITED STATES 385 

pressions may be disseminated: (a) that .the Chinese peo- 
ple and Government are backward in responding to such 
advances, (b) that Chinese are less friendly to America 
than are Japanese, (c) that the United States is not 
inclined actively to support China in preserving her in- 
tegrity and the " open door ! " All these Inferences are 
what other foreign interests in the East desire, rather 
than what Is to the Interest of America. Influences 
which opposed a visit of the fleet to China seem, therefore, 
substantially to have had their way in shaping Impressions 
made by this Incident. 

This, however, should be remembered: Any adverse 
impressions which Chinese may get from the incident will 
accrue to the United States and American interests In 
China, while the part played by other foreign Interests 
probably will be overlooked, or minimized. I wonder for 
how long will our eastern policy continue to be. In Its minor 
phases, the cat's-paw of other nations? I cannot see what 
America has to gain by lending support, even passively, to 
a policy which tends to secure competing nations in their 
present advantages by arraying against American enter- 
prise in China the Inertia of obsolete conditions. The 
principles enunciated by Mr. Taft at Shanghai carry 
greater promise for all legitimate interests in China, and it 
may be hoped that they will be given effect by the formula- 
tion and prosecution of a real American policy for the East. 



CHAPTER XXVIII 

FOREIGN RESIDENTS IN CHINA 

The Foreign Settlements — Their Development and 
Growth — Modern Shanghai — Government of the For- 
eigners — Their Character — Double Standards of Life — 
Gradual Reversion to Normal — Establishment of Foreign 
Courts — Process of Social Evolution — Position of the 
United States — Regulation of Social Evils — Attraction 
OF Undesirable Classes to American Jurisdiction — Cre- 
ation OF a United States Court for China — Attempts to 
Destroy It — Their Failure — Uses of the Court — 
American Consular Needs — Foolish "Economy" — Pres- 
ent Status of Foreigners — Their Anomalous Position — 
The Foreign Missionaries. 

A GRAVE international question growing out of the evo- 
lution of China is involved in the situation of foreign resi- 
dents there. When, in order that foreign trade of the 
Empire might develop, treaty ports with so-called " con- 
cessions " set apart for the residence of foreigners were 
established, it is doubtful if their remarkable growth was 
foreseen. However this may have been, these concessions 
have developed Into modern social and business communi- 
ties, with all the activities and relations which such a con- 
dition creates, and their government presents some unusual 
features. The foreign settlements of Shanghai perhaps 
afford the best example of this peculiar situation. The 
settlements are now estimated to have a population of 
from 600,000 to 750,000, and are rapidly growing; and 
this population Includes representatives of nearly every race 

386 , 




u 



fe 



FOREIGN RESIDENTS IN CHINA 387 

and nationality in the world. The situation is further 
complicated by the fact that the foreign settlements adjoin 
the native city, with its large Chinese population, thus 
really forming a single great community. 

In the beginning, the Chinese Government granted sep- 
arate concessions at Shanghai to the more important treaty 
powers; but in time all of them except the French con- 
cession were amalgamated into one called the Interna- 
tional Settlement. Since foreigners residing in China 
must be amenable to some law, it has been the practice 
to place them under the jurisdiction of the legation of their 
governments at Peking, and if a nation is not diplomati- 
cally represented there its interests are delegated to the 
care of a friendly power. The foreign legations do not 
exercise actual administrative functions except indirectly, 
and consular representatives in the treaty ports usually per- 
form this duty. With the growth of the settlements, the 
purely legal functions of the administration of extra-terri- 
toriality gradually, in the case of more important nations, 
outgrew and overtaxed the consular staffs, and this led to 
the establishment of regular courts. 

It required, however, consideration and tact to create a 
system by which the settlements could be administered. 
The presence inside their jurisdiction of many Chinese 
(Chinese now constitute about 98 per cent, of the total 
population of the Shanghai foreign concessions) led to 
the creation of a mixed court, whose functions have been 
described. Causes Involving exclusively foreigners, or 
in which foreigners are defendants, must be tried In 
the foreign courts; which means, in the case of national- 
ities which have not established regular courts, that cases 
will be adjudicated In consular courts. To make this 
matter of jurisdiction clear by example, if only Americans 
are involved, a case will be decided by the United States 



388 THE FAR EASTERN QUESTION 

authorities ; if an American is defendant the case also goes 
to the United States authorities; but if an American citi- 
zen or entity is complainant in an action against another 
foreigner, the case will go to the court of the nationality 
of the defendant. Nineteen nations now have consular 
representatives in Shanghai, involving that many differ- 
ent foreign judicial jurisdictions, which gives an idea of 
certain complications of this condition. 

It is clear that this system depends for efficiency, in a 
considerable degree, upon cooperation of the various for- 
y/' eign authorities which jointly subscribe to it. For in- 
stance, a German subject may kill an American citizen in 
the foreign settlements of Shanghai under circumstances 
where the more important witnesses are; foreigners of 
other nationalities, say French and British. The case will 
go to the German court; but the German court cannot 
legally compel British, French or American witnesses to 
answer to its subpoena and testify. They can only be so 
compelled by their own national authorities, and unless 
there is cooperation in such matters between the various 
regular and consular courts the ends of justice may be de- 
feated. Specifically to elucidate the almost infinite legal 
complications which must arise in a community like this 
would be prolix; and probably enough has been said to 
indicate the general condition which exists. One probable 
effect is evident. Failure of any of these numerous juris- 
dictions to maintain a moral and judicial parity with the 
others inevitably will make it a harbor and refuge for un- 
desirable elements in the foreign settlements, and to the 
extent that it lends itself, through official laxity or actual 
connivance, to their protection, it encourages and fosters 
these elements, and is not only a discredit to its nationality, 
but becomes a detriment to the entire community. 

In this connection it is pertinent to consider the char- 



FOREIGN RESIDENTS IN CHINA 389 

acter of foreign communities In China, and this requires a 
brief glance at their history. For many years after for- 
eign trade got a foothold in China, the conditions which 
surrounded residence of foreigners there were extremely 
lax, and this attracted many persons who for various rea- 
sons found residence In western countries no longer satis- 
factory. It resulted, therefore, In accumulation of a for- 
eign population which contained, beside respectable mem- 
bers in the ordinary sense, a varied class of adventurers. 
In the beginning, this class was jointly composed of all 
nationalities represented In the foreign population in about 
similar numerical proportion. A result was that two 
standards of life were established; one which closely fol- 
lowed rules of social and business conduct which exist In 
western countries, and another which indulged many de- 
partures from conventions of western civilization, and 
also from Its ethical practice. The saying: "Oh, any- 
thing goes on the China coast," became a by-word, and 
was made the excuse for actions by foreigners which would 
be severely reprobated In their home countries. A few 
years ago It was common among foreigners In China to 
have more than one domestic establishment, and such a 
life did not seriously detract from a man's social and busi- 
ness position In the community. In business relations with 
Chinese a similar latitude was permitted, which also found 
expression in a phrase : " We are not out here for our 
health." 

Up to a certain point the evolution which contact 
of foreigners with China has caused progressed along 
comparatively parallel lines in respect to nationality. But 
the passing of years brought changes; an immense exten- 
sion of foreign business In the Empire, and consequent 
growth of the foreign communities. As China was 
brought more within the Influence of conventional western 



390 THE FAR EASTERN QUESTION 

business and social standards, it was inevitable that they 
should be more rigidly applied to conduct of foreigners 
there. Those nations whose interests had attained greater 
development naturally were first to take steps to safe- 
guard them by compelling conformity to established cus- 
toms, and this meant closer regulations of business and 
social excrescences. In this, as in many matters, England 
was a pioneer, by establishing a British court in China. 
Other important governments followed this example, un- 
til now most of the major powers directly interested in the 
future of China have created courts there. 

This desirable and proper action was not, however, 
simultaneous or the result of international agreement. 
Each nation acted independently and at different times; 
so reformation of the foreign communities was graduated 
through a period of many years. As definite and properly 
constituted judicial procedure supplemented consular au- 
thority in the administration of justice, and enforced 
normal western standards within the limits of their juris- 
dictions, licentious elements of the foreign communi- 
ties found their opportunities curtailed, and were driven 
to take refuge under the wings of nations which retained 
the old loose methods. Many nations whose interests in 
China are comparatively small have delegated the admin- 
istration of their extra-territorial rights to friendly powers, 
but there remained several havens where parasitic and un- 
wholesome social segments were tolerated. 

Among the greater foreign powers, the United States 
was last to set about properly regulating its nationals in 
China, with a result that undesirable persons and enter- 
prises of all nationalities, and which were compelled to 
shift their legal jurisdiction, accrued to our nationality 
there. Shanghai is the metropolis of the East, and the 
commercial heart of China, and consequently is the Mecca 



FOREIGN RESIDENTS IN CHINA 39 f 

of every fraudulent scheme which is forced by an inhos- 
pitable and too familiar West to try its fortune in the 
East. The underworld of the China coast, especially 
the foreign section of it, is composed of the same classes 
as in other countries; and comprises various phases of 
actual and pseudo-criminality, from an absconding cashier 
or political " grafter " to those members of society whose 
effort is to skirt the edges of law without getting en- 
tangled in its meshes, such as gamblers, prostitutes and 
their attendant parasites. Under ordinary circumstances, 
these elements are regulated by municipal police, but under 
conditions imposed by extra-territoriality this familiar 
method is not always practicable. 

The process by which a major part of this element in ^ 
the foreign settlements of China enlisted under the Stars 
and Stripes is interesting, but is too prolix for introduction 
here. The usual factors would be a disreputable Amer- 
ican to father an enterprise or project, in order to fix its 
nationality, and the tolerance or timidity of an American 
consul, coupled with lack of definite legal jurisdiction. 
Candor prompts one to add that upon occasion the gravi- 
tation of this element toward United States citizenship 
was encouraged by some American consular authorities. 
The exclusion of this class from other great national juris- 
dictions, by relegating it to the position It occupies in the 
West, had the effect of concentrating It, which meant con- 
centration of the " graft " which Is the usual concomi- 
tant of its existence; and this bait proved too tempting 
to be resisted by some former American consuls In China. 
Moreover, these forms of vice, or at least some manifesta- 
tions of them, are too deeply rooted In human habit to 
be eradicated entirely anywhere, which makes them sur- 
reptitiously tolerated even by so-called respectable seg- 
ments of western communities. Take, for instance, 



392 THE FAR EASTERN QUESTION 

gambling and prostitution. In a country like China, 
where gambling is almost a national habit, and concubin- 
age is legitimate, it is not to be presumed that any great 
moral turpitude is attached to them. Whatever we may 
pretend to the contrary, these vices are almost as deeply 
engrafted Into our civilization as they are into that of the 
East, although our outward attitude toward them differs; 
and there is a powerful section of the foreign communi- 
ties of China which wants them to exist provided some 
national skirts can be cleared of responsibility In the mat- 
ter. So while some governments placed an official ban 
upon these social offenses, officials and subjects of those 
governments were quite willing to see them continue to 
exist by taking refuge under other foreign jurisdiction. 
They severely reprobated them in public; oh, yes. Indeed; 
and rather rated Americans for making their position ten- 
able. But other national sections of the foreign popula- 
tion continued to make the existence of such institutions 
possible by freely contributing financial and moral sup- 
port. 

Brusque as this statement may appear. It Is substantially 
true. In fact, one of the Immoral conditions mentioned, 
that one commonly designated the social evil, has its roots 
firmly fixed In strongholds of so-called social respectability 
In China, by Indirectly contributing to their financial sup- 
port, and through the not less powerful relation of per- 
sonal attachments. No element of the foreign community 
of China has been a worse offender In this respect than the 
British. Many years ago the British Government adopted 
a policy In the East, particularly In Its East Indian posses- 
sions, where racial segregation is an important factor In the 
administration of government, of forbidding the presence 
of English women of a certain class; and owing to identity 
of language, even loose American women are excluded 



FOREIGN RESIDENTS IN CHINA 393 

from India, Burma and the Straits Settlements. In adopt- 
ing this poHcy, however, the British Government had only 
political effect in mind, for such women of other nationali- 
ties are tolerated. In Hongkong American loose women 
are permitted, but no English. In China, the regulation 
of other foreign women by Great Britain is not possible, 
but there also British loose women are excluded. But 
Britishers in proportion to their numbers everywhere in the 
Orient contribute their quota to support other foreign 
women of this class; indeed. It is not going too far to say 
that they encourage their presence. So long as British 
" face " in the matter is saved, the average Britisher in 
the East regards with toleration. If not with approval, the 
existence In the community of such elements. 

When, after years of Indifference and neglect. Congress 
awoke to Its responsibility In this matter and created, in 
1906, a United States Court for China, the general situa- 
tion In respect to undesirable foreigners there was about as 
I have Indicated. In establishing this court Congress evi- 
dently acted upon Imperfect and Insufficient Information. 
The enabling act extended to China the laws of the United 
States, the common law and ministerial regulations then 
existing. It is apparent that the code thus extended for 
a working basis for the new court Is very barren. The 
laws of the United States are limited In scope, being con- 
fined to matters which lie within the Federal jurisdiction, 
and do not Include the major part of criminal and civil law 
which applies In the States; the common law Is at best 
rather vague and uncertain; and ministerial regulation, 
even if a comprehensive and practicable code existed — 
which it does not — Is at best a makeshift, and constitutes 
delegation of law making power to a single Individual who 
may not be equipped properly to exercise It. 

Under these conditions the United States Court for 



394 THE FAR EASTERN QUESTION 

China was inaugurated. Hardly was the court organized 
when it began to encounter difficulties. Some of these 
difficulties were due to then unavoidable causes, and some 
were created by foreign elements in Shanghai and other 
parts of China, which at once recognized in it a menace 
to their profitable existence. The direct opposition which 
the court encountered deserves consideration, but the un- 
avoidable difficulties are the more important and may be 
discussed first. 

In organizing the court Judge L. R. Wilfley began by 
striking squarely at one of the foundations of vice and 
quasi-criminality among foreigners in China. He an- 
nounced that persons who desire to practice in the United 
States Court for China must file with the court a certifi- 
cate of good moral character, and pass an examination 
prescribed by the court. As such matters are organized 
In China, this order applied only to American lawyers; 
for it is customary for the court or consul of each nation- 
ality to judge qualifications of its own national prac- 
titioners, and other courts admit these lawyers to prac- 
tice by courtesy. This plan Is the only practicable one 
under the circumstances, and makes each nation responsi- 
ble for the character of its nationals whom it permits to 
practice in the settlements courts. Concentration of cer- 
tain vicious and shady elements under the jurisdiction of 
the United States had induced them to employ Ameri- 
can lawyers in most of the htigation and quasi-legal phases 
which always attend such enterprises, and some Ameri- 
can lawyers had been attracted to China chiefly by this con- 
dition. Immediately after its organization, the United 
States Court offered an examination to persons who de- 
sired to practice before it, which was taken by a number of 
Americans. None of the lawyers whose practice was 
chiefly drawn from the foreign half-world of China passed. 





View of Shanghai International Settlement from the River. 




Scene on the Whang-poo River, Shanghai. 



FOREIGN RESIDENTS IN CHINA 395 

The Court announced that another examination would be 
given in a short time, when those who had failed might 
try again. 

By this time, however, certain elements had recognized 
an enemy in the United States Court, and organized to 
fight it. Such efforts were, naturally, focussed upon the 
judge of the court. American lawyers who had failed 
to pass the examination chose to take umbrage at its 
result, and began to assail Judge Wilfley in various ways. 
In time, when it became apparent that Judge Wilfley was 
not easily to be deflected from the course he had planned, 
a regular campaign to discredit him was organized. A 
fund was provided by the element whose existence was 
threatened, and an American lawyer who failed to pass 
the first examination was selected to carry the war against 
the court to the United States. He went to Washington, 
where he filed a long list of charges against Judge Wilfley, 
alleging abuse of authority in refusing to admit the law- 
yers in question, and in other actions regarding causes in 
litigation before the court. The sensational character of 
these charges resulted in giving the matter considerable 
publicity in America, and a benighted Member of Con- 
gress was induced to introduce a bill to abolish the court. 
This attempt to destroy the prestige of the court in China 
and at home was fostered by telegrams to newspapers in 
the East, repeating the charges against Judge Wilfley in 
a manner calculated to suggest that they were likely to 
lead to his disgrace and retirement. Another fund was 
raised, and an American lawyer made a second trip to 
Washington with the avowed intention of having Judge 
Wilfley impeached. He filed charges against Judge Wil- 
fley with the State Department; but Secretary Root, after 
an investigation, dismissed them. An effort to have Judge 
Wilfley impeached also failed. 



396 THE FAR EASTERN QUESTION 

Of Judge Wilfley's acts in China, that which caused 
more comment are the series known as the American Girl 
cases. It may be remarked, in passing, that the sobriquet 
" American Girls " has for many years been used to desig- 
nate a certain class of women in the East. These women 
have been a conspicuous feature of eastern life. Theirs 
are the smartest equipages to be seen during the fashion- 
able driving hour in the Bubbling Well Road. The 
fame of the demi-monde of Shanghai, for beauty and 
chic, has gone around the world. Not all are Americans, 
but a majority of the more fashionable ones are, owing 
to unusual conditions which formerly existed. Judge 
Wilfley let it be known that the American flag could no 
longer shelter this element. There was consternation, 
followed by panic. Many women left in haste for Hong- 
kong and Japan. Others resorted to the device of chang- 
ing their nationality to one of several jurisdictions 
which still permit the old-time laxity. One method of 
affecting this transition was to marry, and men were found 
in the riff-raff of the China coast who, for a consideration, 
lent their names to this evasion. No social episode has 
for years stirred Shanghai more, and much serious and 
jocular comment passed in the homes and clubs. A for- 
eigner was heard to say: 

" I hear that the price for marrying an American girl 
is quoted at 3,000 taels." 

" Hardly enough inducement, I should say," was the 
reply. 

Although the meretricious attempt to discredit the 
United States Court for China, by assailing the character 
of its first presiding judge, failed, much remains to be done 
before it properly can perform its functions. Americans 
who have studied the situation recommend that Congress 
extend the California statutes to tha Court for China, to- 



FOREIGN RESIDENTS IN CHINA 397 

gether with a number of special provisions. A provision 
which is needed is extension of extradition treaties to 
include our extra-territorial jurisdiction. Special probate 
and corporation laws are required. These are matters 
which imperatively demand action by Congress. A 
United States Court in China will be of little avail in 
establishing American social and business standards on the 
same plane they occupy at home unless it is given some 
law which will cover ordinary crimes and civil actions. 
I doubt if past toleration of social evils has seriously dam- 
aged Americans in the eyes of Chinese, as some severe 
moralists think, for Chinese are by custom and tradition 
themselves very tolerant of such matters. But continued 
failure to assure the business interests of China, that, in is- 
sues between them and Americans, their interests may be 
safe in the United States Court for China, may check re- 
viving friendliness between the two nations, and adversely 
affect the future of American commerce in the East. 

In connection with the position of Americans in China a 
vital factor is the consular service of the United States 
Government. Owing to extraordinary conditions attend- 
ing foreign residence and business throughout the Empire, 
the Government should send to do its service there only the 
best men who can be induced to enter it. John Hay once 
remarked that the position of United States Consul-Gen- 
eral at Shanghai is the most important post in our consular 
service. There is no doubt that this statement is sub- 
stantially true, and in proportion to the prominence of 
the ports where they are located this also is true of our 
other consulates in China. In no other part of the world 
do our consuls have to perform such complex, varied and 
important duties, and only a high degree of intelHgence 
and integrity should be summoned to the work. The con- 
sulate at Shanghai is hardly a consulate proper; that is, 



398 THE FAR EASTERN QUESTION 

it is an ordinary consulate and much beside. There are 
directly connected with the consulate and under the super- 
vision of the Consul-General a post office, a court, a jail, 
an inspection bureau to examine Chinese who wish to go 
to America, a medical bureau, and a commercial depart- 
ment. 

The duties of an American Consul-General at Shanghai 
are reproduced, in kind, though in lesser aggregate, at all 
consular posts in China. To get, however, at the disabil- 
ities under which the service, taking the Shanghai office 
as an example, is now laboring in the East, it is interesting 
to compare it with the position of other foreign nations in 
the same locality. In 1905 the total trade of the United 
States with China was approximately $75,000,000.00, as 
against about $76,000,000.00 for Great Britain, which 
nation led. Japan was that year third with less than 
$60,000,000.00, while Germany "was fourth with about 
$15,000,000.00 and other nations straggling along be- 
hind. Great Britain gives its consulate in Shanghai about 
ten times the working force and facilities that are availa- 
ble for the American consulate, with a legal and judicial 
department entirely separate and independent. The Brit- 
ish consular, court and postal buildings in Shanghai occupy 
extensive sites in the best part of the city, and are ample 
to accommodate the activities they are designed to house. 
The same Is true of most other national buildings. The 
German consulate occupies an Imposing position on the 
river front, and the German post office Is a finer structure 
than some American cities of quarter of a million inhabi- 
tants possess. 

For many years, now, recurring efforts have been 
made by the Consul-General at Shanghai, supported by 
American Interests In the settlement, to procure a building 
properly to house the government branches centered there. 



FOREIGN RESIDENTS IN CHINA 399 

At times during the past twenty years the effort promised 
to be successful. On several occasions an option was se- 
cured on a plot of ground, but each time the deal fell 
through because Congress, actuated by what it was pleased 
to call economy, refused to authorize the purchase. The 
practical operation of this kind of " economy " Is Illus- 
trated by some figures bearing upon the value of real estate 
in Shanghai. Nearly thirty years ago It was proposed to 
purchase as a site for an American government building 
and consular residence a strip along the water front in 
Hongkew, near the present center of the International 
Settlement. The property could then have been bought 
for $15,000.00. It is now occupied by the main offices 
and godowns of the Nippon Yusen Kalsha, and is valued 
at $1,000,000.00. The present American consulate is in 
a street directly In the rear of the N. Y. K. buildings, 
where it pays an amount for annual rent that would have 
purchased a fair site when the consulate was established. 
The British consular and court buildings are valued at 
$1,000,000.00. The British Government did not pay 
anything for the land on which they stand, and has made 
this sum through the rise In values, not accounting the 
saving of rent. The present German consular buildings 
were erected at a cost of about $30,000.00, on a site which 
cost less than $6,000.00. They are now valued at half 
a million dollars. Twelve years ago the then United 
States Consul-General secured an option on a building 
site near the center of the Bund, just opposite the public 
gardens, one of the most desirable locations In the Settle- 
ment, for $28,000.00. It Is now occupied by the Yoko- 
hama Specie Bank, and could be sold for $250,000.00. 
Seven years ago there was an opportunity to secure a good 
site, and its purchase by the Government was urged, but 
without success. It recently changed hands at more than 



400 THE FAR EASTERN QUESTION 

four times the price for which it could then have been 
bought. 

So much for the " economy " of having failed in the 
past to provide proper accommodations for United States 
Government business in the Orient. Of course, no one 
wants or expects the United States Government to specu- 
late in real estate, or to purchase property anywhere only 
because it promises to rise in value, but in considering needs 
of the service in China it is proper to take note that in 
important trade centers there values are steadily advanc- 
ing, and will in all likelihood continue to do so for 
many years. Shanghai, at any rate, is destined to be a 
great city, the commercial center of the Far East, and 
investments in real estate there rest on as solid founda- 
tion as in any growing city in America or Europe. An 
argument that frequently has been urged against proposals 
to acquire suitable accommodations for American con- 
sulates in China, especially coordinate branches of the 
system, such as judicial and postal, is that China may re- 
cover her political autonomy, when the need for such 
facilities by foreign governments will terminate. Even 
so, desirable property always can be disposed of, usually 
at a profit. The United States Government has pald;| 
enough rent in Shanghai to have provided good buildings 
for every consulate it maintains in the Empire had it pur- 
sued the same policy as other foreign nations. That our 
Government's policy in this matter has been shortsighted; 
and expensive to American taxpayers is not now so impor- 
tant as is the fact that the national interests are not being 
properly cared for, and are suffering, by comparison. In 
consequence. Several of its consulates In the East an- 
nually turn in a profit to the United States Government. 
It Is Impossible to close one's eyes to the fact that 
the present status of foreigners In China constitutes an 



FOREIGN RESIDENTS IN CHINA 401 

anomaly, and cannot be Indefinitely continued If the Em- 
pire endures. The foreign settlements at Shanghai are 
among the best conducted municipalities In the world. 
Both the French and International settlements (which form 
one community in a social and business sense) are adminis- 
tered exclusively by foreigners, although Chinese constitute 
about 98 per cent, of the population, own perhaps nine- 
tenths of real property, and probably pay nine-tenths of 
the taxes. Foreign residents of Shanghai claim that this 
fine city, with its good streets, electric lighting system, 
water works, bridges, fire departments, efficient police, and 
stable government would never have existed except for 
their efforts, and that gravitation of Chinese to it Is be- 
cause their lives and property are safer there, and their 
condition better than where they are entirely subject to 
their own Government. This view Is reasonable, but ap- 
parently It fails to consider that these settlements never 
could have attained their present condition without the 
participation of Chinese. The meanest 'barrow or 'rick- 
sha coolie owns an Increment In the civic Improvements 
and benefits of the settlements, for he contributes his 
quota of taxes to create and maintain them. To-day 
the Chinese are as necessary to the foreign settlements 
as are foreigners, and If Tor any reason they should 
abandon their residence there the settlements quickly 
would revert to a position of comparative unimportance. 
Indeed, these settlements provide an excellent example 
of the mutual advantages which come from peaceful con- 
tact of the East and West. 

Chinese appreciate that the existence of foreign settle- 
ments benefits them, yet one can observe among Chinese 
the growth of a desire directly to participate In their ad- 
ministration. Chinese residents of the settlements are 
beginning to note discrepancies between their situation and 



402 THE FAR EASTERN QUESTION 

that of foreigners, and to resent them. In a way, this 
disposition is manifestation of a growing national spirit. 
Chinese are beginning to measure their condition by new 
standards. A situation which was satisfactory to them 
ten or twenty years ago does not content them now. 
Their views of hfe and of the world are broadening, and 
since western influence and example chiefly is responsible 
for this evolution, the West logically cannot deplore it. 

Yet most foreigners in China do deplore it, and many 
see in It a menace to their position. To speak of abolish- 
ing extra-territoriality to the average foreign resident in 
China Is something like shaking a red rag at a bull; he 
at once has a vision of himself and family at the mercy 
of a Chinese mob, or If not that, of disintegration of 
his property through reversion, under Chinese adminis- 
tration, of the settlements to Oriental conditions of sani- 
tation and civic Institutions. Similar forebodings were. 
Indulged when extra-territoriality was abolished in Japan., 
It is curious to note that foreign residents In China who for; 
so long have affected to despise Chinese for their alleged 
lack of patriotism now profess to find a peril In certain logi- 
cal results of the new nationalism. Nevertheless, for- 
eigners In China will, I have no doubt, find It necessary to 
recognize this altered attitude of Chinese toward some 
manifestations of western activity there, and to shift their 
own attitude to conform to It. 

The situation of foreign religious missionaries In China, 
always Interesting, Is being affected by the new conditions. 
Their presence has been, directly and indirectly, the cause 
of many disorders In the past, the blame for which It .Is 
profitless now to endeavor to fix. Such disorders usually 
spring from dissentlons between Chinese converts to Chris- 
tianity and orthodox Chinese, and It Is In coming to the 
support of native converts that foreign missionaries fre- 




a 



u 



u 




u 



FOREIGN RESIDENTS IN CHINA 403 

quently come into conflict with popular sentiment, and be- 
come objects of attack. Often a question of disputed ju- 
risdiction causes a clash between missionaries and Chi- 
nese officials. Fortunately, such occurrences are less fre- 
quent than they formerly were, which partly is due to 
dispelling of popular prejudices against foreigners, and 
partly to abandonment by missionaries of methods likely 
to cause friction. I think that most foreign mission- 
aries in China now recognize that it will not in the fu- 
ture be practicable for western nations to support them 
in issues with the Chinese Government which arise from 
religious activity. Such a policy is inconsistent with west- 
ern modern political institutions, and incompatible with 
maintenance of international equity. There is a disposi- 
tion among missionaries to be less aggressive in proselyt- 
ing, and rather to devote themselves to medical and edu- 
cational work, hoping that by thus aiding and benefiting 
Chinese along practical lines they may open a way 
for spiritual influence to enter. That foreign mission- 
aries have done and are now doing valuable educational 
work in China is appreciated by a majority of enlightened 
Chinese, who have no disposition to disturb them as long 
as their presence and work does not create disturbing po- 
litical and social complications. 

The relegation In Japan, by the abolition of extra- 
territoriality, of foreign missionaries to the same status 
which religious teachers have in western countries, has 
had one Interesting result. This Is the growth of a dis- 
position among Japanese Christians to dispense with for- 
eign ministers in their churches, in favor of Japanese 
preachers, and to manage their own church affairs. The 
foreign missionaries are troubled by this independent 
spirit of their converts, yet hardly can resent it. It evi- 
dently is a logical result of the evolution of Japan, and 
in time a similar situation may develop in China. 



CHAPTER XXIX 

THE PHILIPPINES TO-DAY 

A Shuttlecock of Politics — The Situation in Evolu- 
tion — The Military Regime — Civil Government — 
Heritages of the Insurrection — Essence of the Ameri- 
can Policy — Predictions of Failure — Growth of Racial 
Antagonism — Attitude of Some Americans — The Prob- 
lem Presented — Evolution of Filipino Participation in 
THE Government — The Situation Now — Americans in 
THE Government — The Bureaus — Their Relation to 
the Whole Work — Americans Losing Heart — Reasons 
FOR This Sentiment — The Dilemma — Disintegration of 
the " Independence " Movement. 

Since their acquisition by the United States the Philip- 
pine Islands have suffered from an excess of politics. 

Primarily, they have to some extent been the shuttlecock 
of American party politics, in the sense that they have 
been used as an issue in attempts to further factional 
interests in the United States, often without real regard 
for the interests of the Filipinos. Secondarily, they have 
felt the direct application of government in the course of 
constant evolution of its basic principles and administra- 
tive forms. 

Manifestations of the first condition fortunately are 
diminishing, and probably will become practically extinct 
with better understanding by the American people of the 
situation in the islands, and their relation to us. But 
the second condition, though being slowly Improved by 
modification, still exists in some degree, and must continue 

404 



THE PHILIPPINES TO-DAY 405 

In a variable equation for many years; and this gives to 
the political problem there perennial interest and im- 
portance. 

It hardly would be worth while to mention the former 
military regime in this connection, since it is improb- 
able that there will be occasion to revert to it, did it 
not embody the genesis of sentiments which still remain 
active factors in insular politics. The military regime 
was, naturally and essentially, a government administered 
almost exclusively by Americans, with immediate aims 
and purposes of the United States chiefly in mind. Even 
if a state of insurrection had not existed, it is probable 
that this condition would have had the effect of dividing 
the community into two classes, foreign and native, each 
feeling that its interests were somewhat antagonistic to 
those of the other. The insurrection made this certain, 
and the line then drawn is still perceptible in nearly all 
political issues. 

Circumstances which attended the beginnings of civil 
government made it inevitable that it would inherit the 
condition which was the basis for this sentiment. The 
change was approached with caution and some uncertainty, 
and necessarily was gradual. In attempting to formulate 
a Philippine policy the United States had a choice of sev- 
eral alternatives: to exploit the islands chiefly for the 
benefit of the external sovereign power, using force to 
maintain order and compel submission; to govern the 
islands by force, but with justice and an equity subordi- 
nated only to broader national Interests; to administer 
the Islands with a view to inculcating liberal political prin- 
ciples, affording practice in their exercise, and ultimately 
granting local self-government when the people are fitted 
for it. The first mentioned policy Is substantially exem- 
plified by Dutch administration in Java and the Celebes, 



4o6 THE FAR EASTERN QUESTION 

and the second by British rule in Egypt and India. Of 
the third modern history affords no parallel; but the 
United States Government elected to try this experiment, 
believing it to accord better with the principles of its 
constitution. 

Had American authority been extended to the Philip- 
pines under different circumstances, it might have been 
possible to begin this experiment unhandicapped by pre- 
conceived racial antipathy. Unfortunately, however, this 
condition already existed when civil government was es- 
tablished, and at once became one of its principal embar- 
rassments. The essence of the policy thus put into practice 
demanded employment of Filipinos in the administration 
of government, both as a means of satisfying the people, 
and as the only practical way to teach them republican 
institutions. In the beginning comparatively few natives 
were given office, except in capacities which Americans 
could not be induced to accept. Yet this moderate and 
tentative step caused dire predictions of disaster by certain 
segments of the American element, which feared or pre- 
tended to fear that native administrative Incapacity, 
coupled with disloyalty, would embarrass or altogether 
disrupt the Insular Government. Many Americans then 
thought that a civil government would not be able to com- 
plete the suppression of Internal disorder, and thought 
abolition of the military regime to be premature and peri- 
lous. 

This opinion of a majority of Americans, who were 
frank In expressing It, tended to keep alive racial antagon- 
ism, through assumption of superiority on one side, and 
presumption by It of Inferiority of the other. This atti- 
tude is galling even to a poor spirited people, and in 
this case prevented rapid healing of the breach caused 
by war. The situation was indeed dIfEcult. During the 



THE PHILIPPINES TO-DAY 407 

military regime the position of Americans was one of 
almost absolute supremacy, and establishment of civil 
government again placed them on a level with the natives 
so far as their position before the law is concerned. This 
in itself was irritating to a certain type of individual, 
especially one somewhat exalted by an unfamiliar taste 
of authority. The truth is that many Americans then 
in the islands had, being for the first time in a foreign 
atmosphere, and for the first time measuring themselves 
and their political capacity in comparison with a backward 
and subjugated race, lost the sense of perspective and 
were inclined to appreciate themselves and depreciate the 
Filipinos out of proportion to the genuine qualities of 
either. 

Those men, among whom William H. Taft was prom- 
inent, who had responsibility for the success or failure of 
our chosen policy, evidently recognized the difficulties of 
the situation; but felt the necessity of moving along one 
of two paths which, while apparently only slightly diverg- 
ing in the beginning, ultimately must lead to widely differ- 
ent results. To have taken the view of the problem as 
it was held at the time by most American residents would 
have amounted to practical abandonment of a fundamental 
hypothesis of our policy before it had been tried, by 
assuming Filipinos to be Incapable of attaining the 
goal which we voluntarily had set for them. By out- 
wardly setting up twO' standards of capacity, and two 
official and political strata in the administration, the 
Government would have hardened and given permanency 
to racial feeling which already existed and made it, as 
the British have done in India, irreconcilable to real 
native autonomy beyond a certain point. This condition 
is not incompatible with the theory and object of Eng- 
land's policy in India, although the present situation there 



4o8 THE FAR EASTERN QUESTION 

is causing grave doubts in some quarters as to its ul- 
timate success; but it is absolutely hostile to the spirit 
of the political experiment which the United States is 
conducting in the Philippines, and if pursued would in 
time reduce it to absurdity. The Government in Wash- 
ington and in Manila apparently has known this from 
the beginning, and so far has persistently adhered to its 
original theory, notwithstanding the disgruntled attitude 
of a large proportion of Americans who reside in the 
islands, and frequent flank attacks directed from America. 
When civil government was established, in 1901, Filipi- 
nos were invited to participate in its administration, and 
quite a number of them were appointed to important offi- 
ces. The policy then established has been consistently 
continued during the years that have since elapsed. Dur- 
ing this period the proportion of Filipino officials and em- 
ployes of the Government has steadily increased, while the 
proportion of American officials and employes has dimin- 
ished in a similar ratio. In the beginning many dictums, 
which now seen in perspective seem rather ridiculous, of al- 
leged Filipino incapacity were advanced, and for a while 
adopted in administrative organization. It was held that 
a Filipino could not, for instance, drive a team of Ameri- 
can horses or mules; and that a native could not be en- 
trusted with the duties of ordinary clerkships. American 
teamsters were employed, and Americans were used at 
$60.00 per month wages to perform work which in China 
and Japan is done by natives for $6.00 per month. Thou- 
sands of Americans who had served in the army secured 
their discharge in the islands, and many found employ- 
ment In Government positions. To the credit of our na- 
tion It may be said that these men, on the whole, per- 
formed their duties well, and have made an indelible 
imprint upon the islands and people. , 



THE PHILIPPINES TO-DAY 409 

Such a condition could not long continue. The insular 
revenue is small, the needs of the people and country- 
many; and it is not just to tax the people to pay high 
wages to Americans, while excluding Filipinos from posi- 
tions they are quite capable of filling at lower wages. 
It was necessary to reduce administrative expenses where- 
ever possible, and this meant that many Americans had 
to go. The process has been gradual, and has extended 
from the bottom upward. Filipinos now drive the mule 
teams, and check imports at the custom house. The 
work is as well done, although a few more men are en- 
gaged in It, than when Americans were employed, and 
at half the expense to the Government. In this connection 
it should be kept In mind that the FiHpino people pay a 
greater part of the taxes which support the Insular Gov- 
ernment. 

To-day Filipinos occupy a prominent place In the ad- 
ministration of the Government. Of provincial governors 
there were in 1908 twenty-nine natives and only eight 
Americans. The Supreme Court was composed of four 
Americans and three natives. The Court of First In- 
stance included thirteen native and nine American judges. 
The Land Court was composed of one native and one 
American judge, the senior being a native. Nearly all the 
third members of provincial boards are natives. A ma- 
jority of provincial treasurers still were Americans, but the 
percentage of natives who are appointed to this position 
is steadily growing. Practically all municipal presidentes, 
the barrio tenientes and justices of the peace are natives. 
The Commission has three natives upon it, and there was 
not an American In the first Assembly. 

When the brief time that has passed since the estab- 
lishment of civil government and the antecedents for it 
are considered, It must be conceded that the American 



4IO THE FAR EASTERN QUESTION 

policy has made substantial progress toward fulfillment 
of its promises. But while much administrative machinery 
has been turned over to Filipinos, a majority of executive 
positions under the central Government still are filled by 
Americans. Filipino members of the Commission, for 
instance, do not at present exercise executive functions. 
Departmental administrative bureaus are under supervi- 
sion of the five American commissioners, while the largei 
bureaus are directed by American chiefs. Thus the buj 
reaus of Education, Science, Agriculture, Prisons, Police| 
Finance, Printing, Posts, Justice, Revenue, etc., are appor- 
tioned among the five American commissioners, like^ 
Cabinet positions at home; while bureaus are managed by 
officers appointed by the central authority, which in this 
case is the Secretary of War, under the President. 

Under American administration these bureaus have^ 
done remarkable work in the Islands. They have brought 
order out of chaos, have replaced Inefficiency by efficiency^ 
have created Important and beneficial institutions wher^ 
nothing previously existed, and have laid firm foundations 
for a stable and modern government. The bureaus con-| 
stitute the administrative backbone of the Government,! 
and their efficiency depends not only upon the chiefs, but 
also upon the Integrity and efficiency of various depart-j 
ment heads, clerks and employes. 

To elucidate the work which the bureaus have accom-i 
plished would require full examination of all of themj 
which Is not possible here; but as an example of what li 
being done one may be selected which makes a peculiai 
appeal to the Interest of the American people — the Bu-j 
reau of Education. Since 1901 some 2,300 Amerlcai 
school teachers have served In the Islands, and more than 
800 still are employed. It Is hardly possible to speak 
too highly of their work, notwithstanding scepticism In 



1 



THE PHILIPPINES TO-DAY 411 

some quarters about the practical value of some instruction 
given. A majority of these teachers came to the islands 
knowing no language except English, and immediately 
were distributed through the provinces, and there set to 
organizing schools. Their work may briefly be summar- 
ized by giving some of its results. There were in 1907 
3,687 schools open, with an enrollment of nearly half a 
miUion pupils. Over 6,000 Filipino teachers are em- 
ployed, a majority of whom were themselves instructed 
in the work by American teachers and school superintend- 
ents. In the course of a recent trip about the islands I 
gained an Inkling of conditions under which this work 
has been accomplished. At many places the head of the 
local school district is the only American living there, 
and the school buildings little better than shacks; yet 
the school would appear to be doing nicely. The schools 
in these islands literally are pioneers of our civilization, 
and propagators of our political institutions. 

In their special branches the other bureaus have accom- 
plished quite as much as has the Bureau of Education. 
The bureaus have been brought Into this discussion, how- 
ever, not for the purpose of describing their work, but 
to bring out a factor which bears directly upon the political 
situation. There is danger that the efficiency of the bu- 
reaus will be disintegrated by gradual elimination of the 
American element which has organized and now directs 
them. Americans In the Government service are becoming 
dissatisfied, not with their positions so much as with their 
prospects. They note the trend of our policy, and al- 
ready foresee that In time, should It be adhered to, Fili- 
pinos will replace Americans in the bureaus. It may be 
said, in passing, that a majority of bureau employes now 
are natives, but the more Important places are held by 
Americans, who exercise the superior authority. This 



412 THE FAR EASTERN QUESTION 

feeling is extending to other branches of the Government, 
to American judges of the Court of First Instance, has 
even penetrated to the Commission. In fact, a disinchna- 
tion to remain in the Insular service is diffused through the 
American element in the civil list from top to bottom. 

The position in which the average American Govern- 
ment employe finds himself substantially is this: He 
comes to the Philippines in the hope of opening up a 
career for himself in a new country, often imbued with 
a patriotic missionary spirit, and sets to work at an ardu- 
ous and difficult task. Years pass; chiefly through the 
efforts of himself and his American associates the work 
Is gradually put upon an efficient basis; it becomes less 
arduous and perplexing. But, if he occupies a position 
in one of the lower or intermediate grades, he sees Fil- 
ipinos whom he has taught aspiring for his place, and 
frequently getting it. This wave has not yet reached 
the higher department clerks, or the bureau heads, but 
they can see it coming. A clerk who has been working 
with a view to promotion sees his chances growing remote ; 
a bureau chief who may not fear for his own place realizes 
that he is losing his best subordinates, and that his bureau 
will lose efficiency. Furthermore, the novelty of life in 
the islands has worn away. Americans realize that they 
probably are doing no better than they could do at home, 
that it costs all they earn to live as they must live, and 
that their work is opening no satisfactory road to advance- 
ment. So a disposition to get out of the service is 
growing, and hardly a month passes without the bureaus 
losing a number of competent employes whose places 
cannot satisfactorily be filled. At present It Is the in- 
termediate grades of clerks who are dropping out, men 
who are earning from $1,200.00 to $2,000.00 a year. 

This would not, perhaps, really .matter much if these 



THE PHILIPPINES TO-DAY 413 

men could be replaced by Filipinos of equal eflEciency. 
Unfortunately, however, this cannot now be done, and 
there is no reasonable prospect that it may for a genera- 
tion or so. The Government therefore is confronted with 
the problem of how to retain such Americans in the serv- 
ice. The existence of this difficulty is officially recog- 
nized, and the passage of a civil service pension law for 
the islands was recommended to the Assembly. This may 
in time be done; but Americans feel that their future 
now rests with Filipinos, not with their home Govern- 
ment, and few believe that Filipinos will do anything to 
retain Americans in the insular service. This view is not 
without foundation. There is no doubt that Filipinos 
are jealous, even of the limited place Americans now 
occupy in the Government, and of the higher salaries 
which they draw. I believe that the average Filipino 
deep down in his heart would like to see all offices, great 
and small, held by natives, and will do what he can to 
bring this about. Given this disposition, to make the 
situation of Americans precarious is a means to an end. 
That by pursuing such a policy the Filipinos will injure 
themselves, by retarding progress of their Government 
and development of the country is not, I fear, now gen- 
erally appreciated by them. Already certain elements in 
the Assembly have proposed to reduce salaries of offices 
held by Americans, and while such a measure was not 
enacted its proposal is evidence of desire to eliminate them. 
The present political capacity of Filipinos and their 
progress In the understanding of liberal institutions has 
a definite bearing upon this proposition. On the day 
when Filipinos are adjudged qualified to administer all 
important governmental matters they will be ready for 
complete self-government. It seems to be recognized In 
high quarters that they have not yet attained this qualifica- 



414 THE FAR EASTERN QUESTION 

tion. Mr. Taft has said that one or two generations 
probably will pass before full autonomy can safely be 
granted. The hypothesis of our policy still assumes, there- 
fore, that certain civic factors are lacking in native abil- 
ity and character which must now and for some time to 
come be suppHed by an American element in administra- 
tive affairs. The Washington Government and its repre- 
sentative in the islands, the American segment of the 
Commission, have drawn this line clearly enough in the- 
ory, but there are some indications of a tendency to over- 
step it in practice. 

Taking the Insular Government by itself, as It Is now 
organized, there are two checks upon the native element 
in administrative matters: The Comm.ission and the 
Supreme Court. As long as majorities of these bodies 
are American It will be difficult for the Government to 
stray very far from a path circumscribed by American! 
institutions. With either or both of these bodies con- 
trolled by Filipinos, many Americans fear that disposition} 
to deviate from liberal Institutions will creep In, and tha^ 
racial discrimination again will raise Its ugly head. 
Congress can veto any or all acts of the Insular Gov-j 
ernment; but Americans In the Islands feel that they are 
a long way from home, and that It Is not always easy] 
to make Congress appreciate certain peculiarities of thei 
situation In the Philippines. They point out that in thei 
past high American officials have been replaced because| 
they were not satisfactory to Filipinos, and that this pollcyj 
of the Washington Government has the effect of weaken- 
ing the authority of Its representatives here, and tends toj 
diminish American prestige. 

This feeling, which had somewhat subsided under the| 
Influence of Secretary Taft's visit, in October, 1907, re- 



THE PHILIPPINES TO-DAY 415 

vived as the attitude of the Commission toward the new 
Assembly developed. The Commission evidently has the 
design to make the Assembly share responsibility, at least 
in popular estimation, for the administration of govern- 
ment, with the object of diverting attention from the 
American policy and concentrating It upon affairs of 
the islands. By making Filipinos realize that they, 
through their chosen representatives, have the fate of their 
country in their own hands, many pernicious political Ideas 
will lose force, and the way to peaceful fruition of the 
American policy be cleared of serious obstacles. This is a 
practical policy, and theoretically sound; but It easily is 
possible to carry it so far as to cause reaction. If it 
should have the effect of causing a large number of ex- 
perienced and efficient American Government employes to 
quit the service, or, by leading Filipinos to think that 
natives can fill these places, create an agitation to oust 
Americans, it may counteract much of the Assembly's use- 
fulness. 

American officials and employes of the Philippine Gov- 
ernment, of high and low degree, constitute a body whose 
efficiency and integrity Is not surpassed, indeed, is rarely 
equalled anywhere. It is, I believe, superior in morale 
and personnel to similar bodies in the United States. 
Americans in the Philippines have become reconciled to 
the knowledge that Filipinos do not like them, and do 
not now appreciate at Its true value the work our Govern- 
ment is doing; but the real drop of gall in the cup of these 
Americans is that their work Is not appreciated at home. 
So American government employes are beginning to ask: 
" What's the use? " Unless they receive an encouraging 
answer to this question, they will get out of the Philippine 
service at the first favorable opportunity. One of them, 



41 6 THE FAR EASTERN QUESTION 

speaking to me about certain political tendencies in the 
islands, said: 

" I'm not going to spend the best years of my life 
working to help the Filipinos only to have them kick me 
out in the end." 

The Government is thus between the horns of a serious 
dilemma. It cannot justly make this a white man's coun- 
try for white men, and a brown man's country for brown 
men, as some Americans would have it. Yet now and 
for many years the tiller must remain in American hands 
if progress is to continue. And, notwithstanding pes- 
simistic forebodings, he must be wilfully blind who cannot 
see that we are making real progress in these islands. 
The entire country is at peace. There is no probability, 
one may venture to say there is no possibility of serious re- 
vival of the Insurrection. The people rapidly are learning 
the forms, if they do not as yet entirely grasp the spirit of 
republican institutions. Caciqiieism in Its myriad semb- 
lances gradually is being suppressed as the tao learns his 
rights under the law, and that he can secure justice In 
the courts. A compliment is due to native provincial 
governors, and the native judiciary, for their efforts to- 
ward moderating old evils. The native Justices of the 
Supreme Court are generally regarded, among those who 
are familiar with their work, to be quite equal both In 
ability and integrity to the American members; indeed, I 
have heard Americans assert that the three native justices 
are the real strength of the court. I -see no serious cause 
for uneasiness should the Supreme ^Court even come to 
contain a majority of native justices. The native judges 
of the Court of First Instance are giving satisfaction. But 
the strong and experienced American hand should not yield 
the tiller yet awhile. 

As to independence for these islands, the less now said 




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THE PHILIPPINES TO-DAY 417 

the better. There undoubtedly is an impulse toward na- 
tionality among Filipinos which now expresses itself in 
such an aspiration; but it seems to be diminishing, and 
will not be a disturbing factor in the future unless stimu- 
lated by encouragement from the United States. The 
Japanese war scare of 1907 did much to quiet talk about 
early independence, coupled with nonsensical discussion of 
a sale of the islands to that power. For an instant the 
Philippines had a glimpse of itself as another Korea or 
Formosa, and the vision had a salutary effect. One can- 
not say that the Philippine policy of the United States 
has plain sailing ahead, but there is every reason to believe 
that the worse difficulties in the way of establishing stable 
political institutions have been surmounted. 



CHAPTER XXX 

THE PHILIPPINE ASSEMBLY 

A Significant Episode — Conditions Precedent — Ex- 
tension OF THE Suffrage — Qualifications of Voters — 
The Special Election Law — Qualifications of Delegates 
— Filipino Political Traits — The Registration '■ — Popu- 
lar Indifference — The Campaign — Parties — Pre-elec- 
tion Promises — The Katipunan Flag Incident — Indig- 
nation OF Americans — Result of the Election — Char- 
acter OF Delegates. 

In some respects the inauguration of the Philippine 
Assembly is one of the most interesting and important 
political episodes which has attended progress and de- 
velopment of the American nation. It is another move 
in the attempt to adapt our institutions to the satisfactory 
government of alien and unfamiliar peoples. It gives 
to Filipinos an opportunity to develop and demonstrate 
capacity for self-government; and gradually, under di- 
rection and restraint, to prepare themselves and their coun- 
try for more substantial autonomy. Thus the experiment 
cannot fail to claim a share of the attention of civilization, 
and especially that of the American people, whose altruis- 
tic impulses have made it possible. 

It is only by understanding political conditions which 
preceded convocation of the Assembly that any reasonable 
estimation of elements which compose it and probabilities 
which confront it can be made. When in 1901 civil 
government was substituted for military rule, extension 

418 



THE PHILIPPINE ASSEMBLY 419 

of local autonomy to the people was based upon two codes 
— municipal and provincial. The Insurrection had just 
terminated; indeed, its reverberations had not entirely 
died away; and to build a stable administration upon its 
still glowing embers, by granting suffrage to a people 
previously unaccustomed to its use and unacquainted with 
its benefits, was a difficult and venturesome task. After 
much consideration, and not without grave misgivings, the 
Philippine Commission, of which William H. Taft and 
Luke Wright were members, formulated conditions which 
provided a basis for popular suffrage in local elections. 
As the municipal code then adopted has regulated elections 
in the islands since the establishment of civil government, 
and its provisions have been substantially embodied in the 
new election law, it may be well to quote the sections 
relating to qualifications of voters. 

"Sec. 13. Qualifications of voters. — Every male per- 
son twenty-three years of age or over who has had a legal 
residence for a period of six months Immediately preced- 
ing the election in the municipality in which he exercises 
the suffrage, and who is not a citizen or subject of any 
foreign power, and who is comprised within one of the 
following three classes — 

(a) Those who, prior to the 13th of August, 1898, 
held the office of municipal captain, gubernadorclllo, al- 
calde, lieutenant, cabeza de barang gay, or member of 
any ayuntamiento ; 

(b) Those who own real property to the value of five 
hundred pesos, or who annually pay thirty pesos or more 
of the established taxes; 

(c) Those who speak, read and write English or Span- 
ish — shall be entitled to vote at all elections : Provided, 
That officers, soldiers, sailors, or marines of the Army 



420 THE FAR EASTERN QUESTION 

and Navy of the United States shall not be considered 
as having acquired legal residence within the meaning of 
this section by reason of their having been stationed in 
the municipalities for the required six months. 

Sec. 14. Disqualifications. — The following persons 
shall be disqualified from voting: 

(a) Any person who is delinquent in the payment of 
the pubhc taxes assessed since August 13, 1898; 

(b) Any person who has been deprived of the right 
to vote by the sentence of a court of competent jurisdiction 
since August 13, 1898; 

(c) Any person who has taken and violated the oath 
of allegiance to the United States; 

(d) Any person who, on the first day of May, 1901, 
or thereafter, was in arms in the Philippines Islands 
against the authority or sovereignty of the United States, 
whether such person be officer, soldier or civilian ; 

(e) Any person who, since the last day of March, 
1 90 1, has made or hereafter shall make contribution of 
money or other valuable thing in aid of any person or 
organization against the authority or sovereignty of the 
United States, or who shall demand or receive such con- 
tribution from others, or who shall make any contribution 
to any person or organization hostile to or in arms against 
the authority or sovereignty of the United States, for the 
purpose of securing any protection, immunity or benefit; 

(f) Any person who, since the last day of March, 
1 90 1, has or hereafter shall in any manner whatsoever 
give aid and comfort to any person or organization in 
said Islands in opposition to or in arms against the author- 
ity or sovereignty of the United States; 

(g) Insane or feeble minded persons." 

These qualifications do not materially differ from those 



THE PHILIPPINE ASSEMBLY 421 

maintained in some States of the American union, and 
in advanced communities throughout the world. Presi- 
dent McKinley's instructions to the Commission, when 
civil government was established, were that it should give 
a liberal interpretation to the theory of local autonomy 
in drafting the suffrage provisions. The law was de- 
signed to extend the franchise to as many persons as 
conceivably were fitted to exercise it to advantage to them- 
selves or the country. The educational and property 
qualifications are the only departures from general usage 
in the United States ; and some States recently have taken 
measures to eliminate as political factors illiterate and 
impoverished elements of the community. When condi- 
tions that obtained in the islands when this code was 
adopted are considered, it must be conceded to be ex- 
tremely liberal. Those clauses disqualifying persons who 
had taken part in the insurrection, and who surreptitiously 
or openly continued to agitate against the Government, 
were as time passed modified by amnesties, until all 
that now is required for a former insiirrecto to exercise 
the suffrage is to take oath of allegiance to the United 
States and refrain from laboring to overthrow, by secret 
or violent means, its authority in the Philippines. 

When, under the enabling act of Congress in 1902, 
President Roosevelt issued a proclamation ordering an 
election for members of an Assembly to be held, it 
was necessary to enact a special law definitely to circum- 
scribe its conditions. This law divided the islands into 
eighty assembly districts, on a basis of one member for 
each 90,000 inhabitants, and major fraction of 90,000. 
There are thirty-four provinces which have local govern- 
ment. These include all inhabitants except barbaric tribes, 
and Assembly districts were apportioned among them ac- 
cording to population. No province has less than one 



422 THE FAR EASTERN QUESTION 

member, while many have two and several have three. 
Provinces are divided into municipalities, or counties, 
which are subdivided into barrios, or townships. Assem- 
bly districts are composed of a number of contiguous 
municipalities. By adopting this plan the Commission 
found equitable and practical apportionment comparatively 
easy. Municipalities were divided into precincts each con- 
taining not more than four hundred voters, the fixing of 
voting precincts being left to municipal councils; strictly 
bound, however, by provisions of the law which leave only 
essential discretion to local boards. On the whole, the 
regulations closely conform to those of modern election 
laws in the United States, with some minor deviations ow- 
ing to peculiar local conditions. 

The election law defines the qualification for delegates 
to the Assembly as follows: 

"Sec. 12. — A delegate to the Philippine Assembly 
must be at the time of his election a qualified elector of 
the district from which he may be chosen, owing allegiance 
to the United States, and not less than twenty-five years 
of age. 

"Sec. 5. — No Delegate to the Phihppine Assembly 
shall, during the time for which he was elected, be ap- 
pointed to any civil oflice under the authority of the 
Government of the Philippine Islands which shall have 
been created or the emoluments whereof shall have been 
increased during such time; and no person holding any 
oflice under the Government of the Philippine Islands 
shall be a member of said Assembly during his continuance 
in office. 

" Sec. 29. — No public officer shall offer himself as a 
candidate for election, nor shall he be eligible during the 
time that he holds said public office, to election, at any 



THE PHILIPPINE ASSEMBLY 423 

municipal, provincial or Assembly election, except for re- 
election to the position which he may be holding, and 
no judge of the Court of First Instance, justice of the 
peace, provincial fiscal, or officer or employee of the Bureau 
of Constabulary or of the Bureau of Education shall aid 
any candidate or influence in any manner or take any part 
in any election : Provided, however. That the foregoing 
provisions shall not be construed to deprive any person 
otherwise qualified of the right to vote at any election." 

Briefly put, these were the legal provisions under which 
the first Philippine Assembly was selected; and so far 
as experience could afford a basis for conclusions, and 
legal knowledge frame a hypothesis from them, all cus- 
tomary safeguards were thrown about the election. In 
addition, extraordinary precautions were taken to instruct 
the people in the meaning and method of the law. It 
was widely published through the Islands, and sample 
ballots were distributed. A school for election inspectors 
was held in Manila several weeks before the election, at 
which a practical demonstration of its paraphernalia and 
methods was made before 250 Inspectors. Considerable 
Interest In the law was manifested, showing that It had 
been widely read among the Filipino politicians and upper 
classes. Nearly five hundred letters asking questions con- 
cerning it were replied to by the legal department of the 
Philippine Commission. Some of these questions were 
rather amusing. One candidate wanted to know if he 
could provide voters with a rubber stamp of his name, 
so that Illiterate persons might have no trouble In voting 
for him. Many amendments were proposed, and some 
of them agitated by the Filipino press; but few of these 
deserved serious consideration or gave promise of practical 
value. There were some suggestions that the qualifica- 



424 THE FAR EASTERN QUESTION 

tlons of voters be changed; but these had been fixed by 
Congress in the enabhng act and could not be modified. 

Many proposed amendments originated in the inherent 
distrust with which, in pohtical matters, a majority of Fil- 
ipinos regard each other. The law provides that any illit- 
erate or otherwise disabled voter may request an inspector 
to assist him in filling out his ballot. As most inspectors 
are appointed by provincial officials, it usually follows that 
they are partisans of a faction, and it was feared by some 
that inspectors would impose upon voters who applied to 
them for assistance. It was suggested that such voters be 
permitted to take into a booth with them some person " in 
whom they have confidence." Many of these suggestions 
were redolent with the real estimation in which the more 
intelligent Filipinos hold the political capacity of the 
masses. A prominent and respected Filipino official wrote 
to the Commission as follows : 

" The real character of the Filipino cannot have escaped 
the observation of your honors. Almost all Filipinos, 
including those of the professional class, are poor in in- 
telligence, poor in heart, poor in spirit, poor in body, and 
poor in morals; but rich in foolish desires and ambitions; 
so that with this fragile character of theirs any of them 
Is susceptible of being bought for any price or considera- 
tion whatever." 

The penal provisions regarding bribery and similar 
offenses against the purity of the franchise evidently caused 
considerable worry to Filipino politicians. One of these 
wrote to the legal department: 

" The third paragraph of Section 30 of the election 
law threatens punishment to the person who makes any 



THE PHILIPPINE ASSEMBLY 425 

promise to influence the giving or withholding of a vote. 
Does this prescription of the law include candidates who 
publish platforms or manifestos which contain promises 
of good government?" 

A circumstance of elections which is particularly fruit- 
ful of fraud is registration, and in drafting this law care 
was taken to secure entrance to the lists for all persons 
who under a liberal interpretation of the qualifications 
are entitled to the suffrage. But difficulties arose. 
When civil government was established, there were no 
political parties in the islands. The people always had 
depended upon the central government for administrative 
initiative, and took little interest in politics outside their 
local affairs. Thus it happened that when the early muni- 
cipal and provincial elections under American Govern- 
ment were held the people were somewhat puzzled. They 
had no parties or issues, and few leaders whom they 
trusted; so they usually elected for local officers men who 
were prominent and respected in the communities; 
or in other words, the best men. This is, of course, the 
ideal condition in popular government, and is rarely at- 
tained. It was responsible for much of the success which 
attended the beginnings of civil administration, and led 
to some optimistic assumptions concerning the political 
capacity of the people. 

With recurring elections, however, conditions have 
changed. That class of agitators who In the days of the 
Spanish regime were active In promoting dissension, and 
who became prominent in the Insurrection against the 
United States, found In these new conditions a field for 
political activity. Factions soon developed, and each suc- 
ceeding election has brought a depreciation in the char- 
acter of officials elected. Given an Ignorant and simple- 



426 THE FAR EASTERN QUESTION 

minded electorate, an almost total lack of popular ini- 
tiative, and we have the condition where political dem- 
agoguery best thrives. In the Philippines this condition 
exists in an acute degree, and only the restraining hand 
of the central Government has at times prevented disorder 
and reduced abuses to a normal equation. As time passed 
there was noticeable increase in abuses of official position. 
However, in 1907 there were only 182 actions against 
provincial officers on these grounds; which indicates that 
the people are learning their rights and are becoming less 
afraid to testify against corrupt and tyrannical officials. 

The habit of deferring to constituted authority is so 
deep-seated among the people that care was taken in 
drafting the law to restrain the influence of the office 
holding class, and prevent it from controlling the election. 
This was the reason for making officials ineligible as con- 
didates for another office while already holding one, and 
forbidding judges, justices of the peace, constabulary and 
school teachers from taking part in a canvass or election 
except to cast their own votes. Here, again, the law 
harks back to the Spanish regime, when the courts, police 
and parish schools were centers of local political Influence. 
A generation must pass before Filipinos actually can real- 
ize that they need not do as those In authority bid unless 
they wish, and get over their fear of incurring official dis- 
pleasure. The law provides that candidates for the As- 
sembly must reside In the district which they aspire to rep- 
resent. There were the usual evasions of all these provi- 
sions. No sooner was the law pubhshed than a number of 
Filipino " patriots " who live in Manila made haste to es- 
tablish residence in some remote districts for the purpose 
of becoming candidates there. One man (who, by the 
way, was elected) thought it sufficient to visit a district, 
rent a house there, and return to Manila until just before 



THE PHILIPPINE ASSEMBLY 427 

the election, when he again visited his district to conduct 
a whirlwind campaign. 

The registration provided several surprises. Owing to 
the fact that the coming of the Assembly had been dis- 
cussed for years, It was believed by many that the election 
would draw out a large vote. The number of legitimate 
voters in the islands, under provisions of the municipal 
code, never has been determined even with approximate 
accuracy. It Is estimated that probably 600,000 can qual- 
ify, but the registration for any provincial election never 
has gone above 150,000. Ample notice of the time 
for registration was given In all districts, and four days 
designated on which voters might apply. Only 102,487 
voters registered In all the provinces. There were nu- 
merous attempts to explain this seeming apathy. It was 
alleged that in some places the people were intimidated, 
that In others fraudulent methods were employed by fac- 
tions to confine registration to their partisans. In some 
districts complaints of fraud were so well substantiated 
that Government agents were sent to make special inves- 
tigations. Only In one province, however, were serious 
frauds proven. In other districts there undoubtedly 
were minor irregularities often involving fraudulent act 
and Intent. But on the whole there Is no reason to believe 
that registration was attended by greater irregularities 
than frequently occur In the United States. There is 
evidence that fully as many voters were registered who 
could not properly qualify as were Improperly debarred; 
so frauds do not explain the light registration. Alle- 
gations that the Insular Government Indirectly contributed 
its influence to this result have no foundation upon fact; 
Indeed, Its wishes were quite the other way in so far as 
it had any desire In the matter. The explanation is that 
a majority of Filipinos then cared little about the Assem- 



428 THE FAR EASTERN QUESTION 

bly, because it represented nothing tangible to them. The 
tao appreciates the relation to him of his barrio alcalde, 
his municipal presidente and councillors, even of his pro- 
vincial governor. But an Assembly is another matter. 
What is it; what are its powers; what can it do? The 
tao never before had heard of an Assembly. Such a 
thing did not lie within his conception of Government. It 
was too vague for his mind immediately to grasp. So, 
notwithstanding speeches and manifestos, the tao did not 
take the trouble to register. Perhaps next time he will 
display more interest. 

The Assembly campaign, nevertheless, was not with- 
out interesting and significant manifestations. If the 
people generally did not understand what the Assembly 
meant, Filipino politicians did or thought they did; they 
even had an exaggerated idea of its importance. This 
is shown by the fact that several provincial governors re- 
signed in order to become candidates for the Assembly, 
although legitimate emoluments of the latter office are 
less than those of the former. In most districts a num- 
ber of candidates appeared, and the fight waxed hot. 
I have said that political conditions in the islands have 
not yet developed the party system so essential to repub- 
lican form of government; but this statement, while sub- 
stantially true, should be modified. There had sprung 
up a sort of party, or faction, which was spoken of as 
■Federalista, on account of its supposed affiliation with the 
Insular Administration. While the Federalista was not 
strictly speaking a Government party, in the sense of being 
directly associated with it, there is no doubt that it was 
encouraged by leading insular officials as a valuable ad- 
junct in making American rule acceptable to Filipinos and 
in inculcating American political ideals; and its leaders 



i 



THE PHILIPPINE ASSEMBLY 429 

were largely Filipino ojffice holders, and those who favored 
indefinite continuation of the sovereignty of the United 
States. 

The Federalista party having lost some popularity 
through being denounced by its opponents as a tool of 
the Insular Government, the elements which composed 
it were in 1907 reorganized into the Progresista party, 
and its candidates made the Assembly campaign under 
this name. There was no practical issue involved in the 
election, but candidates had to have something to talk 
about which might enlist the attention of the people. 
Under the circumstances it was natural that the politicians 
would revert to the old theme of independence. As far 
as I am able to judge, there is little real desire among 
the masses of Filipinos for independence, and except when 
the matter is thrust upon their attention by agitators both 
there and in the United States, they take slight interest 
in the subject. But the word has a fine sound, especially 
to people whose conception of political freedom is at best 
very vague. So another party took the field, called 
Nacionalista, which advocated severance of the islands 
from the United States and the formation of an entirely 
independent government. 

Factions soon developed in the Nacionalista party; but 
only two secured enough following to gain representation 
in the Assembly — the Independista and the Ivimediatista. 
The Independista and Immediatista differed from the 
Nacionalista only In degree. The Nacionalista favored 
independence, but did not specify just when severance 
should occur. The Independista also urged independence, 
but wanted It *' soon." The Immediatista demanded In- 
dependence at once, and no shilly-shallying about It. 
There was a fourth faction, called Urgentista. This fac- 



430 THE FAR EASTERN QUESTION 

tion wanted independence a little sooner than immediately ; 
but none of the Urgentistas was elected, its followers sup- 
porting candidates of other Nacionalista groups. 

Then there was quite a strong party called Independent. 
This was composed of the moderate element; of those 
who, perhaps, look forward hopefully to eventual inde- 
pendence, or some form of substantial autonomy under 
the protection of the United States, but who are willing 
to wait until the poeple are better fitted for self-govern- 
ment before making a change. The Independents de- 
clared their attitude to be " san color," or without preju- 
dice. In Capiz a party sprang up calling itself Modern- 
ista, but it gained no following outside of that province. 

Although these various groups took party names, and 
denominated themselves as such, they are parties in name 
only. Filipinos have no very definite conception of what 
is meant by party organization. They are a people 
whose political impulses move from the top to the bottom, 
not from the masses to the leaders. Political leadership 
there is purely personal. A man becomes prominent 
largely through the personal following he is able to secure. 
Many Filipinos have the gift of fervent oratory, and usu- 
ally it is by its practice that politicians gain followers. 

The first Assembly campaign proved to be a lively one. 
A number of vernacular newspapers were started in the 
interest of candidates and factions, and the regular Span- 
ish and Filipino newspapers entered into the discussion 
with animation. In the beginning both speakers and 
newspapers were temperate in their utterances. But as 
the campaign progressed, and they became convinced that 
the Government had no intention of restricting or repress- 
ing discussion, a bolder tone was adopted. In a country 
where direct and severe criticism of the Government has 
never, until quite recently, been per.mitted, to assail it 



THE PHILIPPINE ASSEMBLY 431 

is an easy path to cheap popularity, and pohtical dem- 
agogues among candidates for the Assembly quickly seized 
the opportunity. Filipinos will not, as a rule, turn out 
to political meetings, or concern themselves about a cam- 
paign unless discussions are spiced by sensational utter- 
ances. So some candidates vied with each other in this. 
Many who really were conservative in their views were 
compelled, in order to prevent their followers from being 
stampeded by some more fiery orator, to follow the lead 
of demagogues. The formation of Independista, Imme- 
diatista and Urgentista factions of the N acionalista party 
simply was a demonstration of this tendency of candidates 
to "go the other fellow one better." By the time this 
emulation was fully developed, many candidates were 
promising on the stump that if elected they would secure 
independence within a year. Toward the close of the 
campaign many speeches were Incendiary in character, even 
treasonable. 

During It all the Government took no part, and no 
official notice of fiery utterances; although American 
residents of the islands began to feel irritated at some 
expressions used by candidates, and privately criticized 
the Government for its Inaction. The Government, how- 
ever, was pursuing exactly the same policy which is fol- 
lowed under similar circumstances In the United States. 
But while the attitude of the Government was eminently 
correct theoretically, conditions in the Philippines are not 
the same as they are In America. People In the United 
States have had long training in republican institutions, 
and common sense of the community amply discounts sen- 
sational utterances by political speakers and violent jour- 
nalistic diatribes. The average Filipino does not at pres- 
ent possess this saving grace of pohtical " horse sense." 
To him an orator who denounces the Government is some- 



432 THE FAR EASTERN QUESTION 

thing of a hero, for in the old days such a man would have 
been promptly clapped into prison, and when the Govern- 
ment tolerates offensive criticism Filipinos are apt to reason 
that it is timid or afraid, and are inclined to take license 
upon this presumption. 

Notwithstanding some apprehensions of disorder on 
account of such causes, the campaign and election passed 
without any serious contretemps. When it became known 
that the various elements of the Nacionalista party had 
elected a majority of the delegates, a demonstration was 
organized in Manila to celebrate the victory, which was 
attended by a disturbing and significant Incident. During 
the campaign some candidates of the Nacionalista party 
frequently applied offensive epithets to the American peo- 
ple, and It had been customary at the meetings and pro- 
cessions of this party conspicuously to display the flag 
which formerly was the emblem of the insurrection, known 
as the Katipunan banner. It was also usual, however, to 
display an American flag at the same time. On the after- 
noon of August 1 1, 1907, a procession paraded the streets 
of Manila In which were displayed banners bearing in- 
scriptions offensive to American residents, and a number 
of large insiirrecto flags. There also was carried one 
American flag of small size. This procession stopped 
before the meeting hall of the Veteran Army of the 
Philippines, an organization composed of men who served 
In the United States army and na^^ during the Insurrec- 
tion, and a native band played " Agulnaldo's March " 
amid cheers of the demonstrators. The band then played 
a dirge, which was accompanied by shouts of derision. 
In the early evening this or a similar procession proceeded 
to the Luneta, where the Constabulary band was giving 
a concert.' There Is some divergence In accounts of what 
took place. It is alleged that a small American flag 



THE PHILIPPINE ASSEMBLY 433 

which was carried by a Filipino boy was torn from his 
hand and trampled under foot by the crowd. This is 
denied by some; who assert that the offensive demonstra- 
tion was limited to cheers for Filipina Libre and waving 
of numerous Katipunan flags. There is no doubt, how- 
ever, that the demonstration was designed to express con- 
tempt for Americans and the Government of the United 
States. On other occasions, upon rendition of the " Star 
Spangled Banner " at the close of the Luneta concerts, 
actions showing repugnance and contempt were made by 
many Filipinos. 

These cumulative incidents stirred American residents 
of Manila to action. A general committee was appointed, 
which Issued a call for a meeting at the Opera House, on 
August 23. This meeting was an Impressive occasion. 
It was participated in by all classes of American citizens, 
and members of the army and navy. Speeches were made 
by leading members of the American community. These 
were remarkable for moderation. Meanwhile, the Com- 
mission had communicated with Washington, and en- 
acted two amendments of the Sedition Law, placing penal- 
ties upon acts designed to Incite hostility to American 
authority, and forbidding display of the Katipunan flag 
or any insiirrecto emblems. For several days there was 
a feeling of suspense In the city. Filipino politicians real- 
ized that they had gone too far, and the more Influential 
native newspapers depreciated actions such as had led 
to the Luneta Incident. Thus It passed without any seri- 
ous result, and there Is little likelihood that It will be 
repeated. But the American community was profoundly 
moved, and Its sentiment undoubtedly Influenced the Com- 
mission to take prompt action. 

Although no special significance may be attached to the 
result of the election, the returns developed some Interest- 



434 THE FAR EASTERN QUESTION 

ing matters. The total vote cast was 100,493, very 
nearly the total registration. It was divided among the 
various parties and factions as follows: 

Nacionallsta 34>277 

Progresista 24,234 

Independent 25,120 

. Immediatista 7,126 

Independista 6,179 

Catholic 1,192 

Philippine Ind. Church 91 

Scattered 2,005 

Rejected 269 

The delegates elected are apportioned among parties 
and factions as follows: 

Nacionalista 32 

Progresista 16 

Independent 20 

Immediatista 7 

Independista 4 

Catholic I 

Total 80 

While the three Nacionalista groups combined have 
43 seats, a clear majority in the Assembly, their candidates 
polled only 47,582 votes out of a total of over 100,000; 
which shows that a majority of voters cast their ballots 
for conservative candidates. In several districts the vote 
was ridiculously small compared to the population on 
which apportionment was based. In Palawan province 
only 265 votes were cast, in Mindoro 622, and in Bataan, 
Surigao and Zambales less than 800; yet each of these 



THE PHILIPPINE ASSEMBLY 435 

provinces has one delegate. The province where the 
largest vote was cast is Manila, with 7,206. Election 
day passed quietly, and was comparatively free from 
frauds and Intimidation. 

Originating as I have described, and lacking party disci- 
pline to direct its activities, one must predicate specula- 
tion as to the future of this Assembly largely upon the 
character and abilities of the delegates. It is idle to deny 
that many delegates are rampant and shallow demagogues, 
who secured election through promises impossible of ful- 
fillment, and who entered the Assembly with no fixed Idea 
separate from their own personal advantage. Serious 
charges impugning their moral character were officially 
made against twenty-three members of the first Assembly. 
It should be remembered, In this connection, that violent 
personal animosities prevail in the Philippines, and that 
often such charges are made by private enemies upon 
slender grounds. Making due allowance for this condi- 
tion, and bitterness engendered during the recent dis- 
turbed periods, there nevertheless Is small reason to doubt 
that many allegations against these men substantially are 
true. On the other hand, a majority of delegates are 
of good character and promising ability, and some came 
to this new work highly recommended by American offi- 
cials and residents In the Islands. 



CHAPTER XXXI 
THE PHILIPPINE ASSEMBLY — Concluded 

Convocation of the Assembly — American Sentiment 
— Powers of the Assembly — Limitations Upon It — 
Election of a Speaker — Protested Seats — Elimination 
of Party Lines — External Influences — Powers of the 
Commission — The Provincial Elections — Reaction 
From Radicalism — Work of the Assembly — Character 
of Measures Proposed — " Grand Stand Plays " — 
Popular Interest — Some Aspects of This Experiment — 
Possible Commercial Effects — Some Comparisons — Hy- 
pothesis of the American Policy — A Good Beginning. 

These are some antecedents of the body which met for 
the first time at Manila, October i6, 1907. Many and 
diverse opinions as to what it might do had been formed 
by persons acquainted with its personnel and the situa- 
tion with which it must deal. These opinions may be 
crystallized into two general points of view; that held 
by a great majority of American and European residents, 
and that of the Filipinos. Americans, especially the busi- 
ness element, regarded the experiment with uneasiness, 
even with apprehension. The opinion was general among 
Americans in the islands, particularly those who have in- 
vestments there, that granting an Assembly was prema- 
ture ; that the people are not yet prepared for It, and that 
it is apt to prove a source of disquieting agitation, if 
not a fomenter of disorder. These misgivings undoubt- 
edly have some apparent warrant in the situation, and 

436 



THE PHILIPPINE ASSEMBLY 437 

In conclusions which may be drawn, from experiences 
based upon similar conditions elsewhere. Summed up, 
they rest upon belief in present poUtical Incapacity of the 
Filipino people as a whole, fear that self-government is 
being extended to them more rapidly than they can absorb 
and apply its principles, and that these are fundamental 
errors of policy which may culminate In a disastrous reac- 
tion. It Is but natural that Filipinos themselves should 
not share these misgivings or views, although It is well 
known that some of the more far-sighted among them 
seriously doubt the expediency of too rapid extension of 
pohtlcal autonomy to the islands. It should be said, also, 
that some Americans who reside there favor the present 
policy, and expect good results from it. 

The Assembly Is affected by the limitations of powers 
conferred upon It, and by checks upon the use of these 
powers; and In this connection It should be remembered 
that the Assembly is only part of the Philippine Legisla- 
ture. The Phlhppine Commission constitutes a sort of 
Upper House, which exercises concurrent legislative powers 
with the Assembly. The Commission Is composed of eight 
members, at present five Americans and three Filipinos. 
Each American commissioner has executive power and du- 
ties, while Filipino members exercise only legislative 
functions. Until organization of the Assembly, the Com- 
mission has legislated for the islands, with approval of 
the Secretary of War, the President and Congress. The 
Commission still retains exclusive legislative control over 
the unorganized, or barbaric provinces. 

The legislative body thus comprised has the usual pow- 
ers and functions of similar bodies In the United States, 
with a few exceptions. The Governor-General has no 
veto upon legislation, being a member of the Commission 
and, consequently, a member of the legislature. Laws 



438 THE FAR EASTERN QUESTION 

passed by the legislature will stand unless nullified by act 
of Congress, and operate from the time of their enact- 
ment until so nullified or repealed. There is one impor- 
tant limitation upon powers of the legislature, in the matter 
of appropriations. If the legislature should adjourn 
without making appropriation for the annual budget, the 
appropriation for the preceding year is thereby automati- 
cally re-enacted. This provision was designed to prevent 
the Assembly from blocking administration of the Govern- 
ment by refusing to make appropriations for its main- 
tenance. 

While the history of the Assembly is as yet too brief 
to permit definite conclusions concerning it to be drawn, 
the first session brought into play and to some extent re- 
vealed personalities and impulses which direct it; and the 
exposition of men and measures, as expressed in actual 
legislative work, which constitutes its record up to date is 
interesting. The political factors which have influenced 
the Assembly may be discriminated as external and in- 
ternal, and these are best considered separately. The 
external factor is represented by the Commission, and 
various elements which compose public opinion. The in- 
ternal factor is confined to the personnel of the lower 
house Itself, together with aspirations and ambitions which 
it embodies and represents. 

Actions of most legislative bodies are circumscribed and 
directed through parties; and while the Philippine As- 
sembly Is not an exception to this general rule, it has so 
far presented some modifications of it. Although the 
campaign for election of delegates was conducted in party 
names, and members took their seats as representatives 
of these parties,, there was little real political cohesion 
among various groups when the Assembly convened. 



THE PHILIPPINE ASSEMBLY 439 

Of these so-called parties, only three represented political 
views definite enough to permit distinction among them. 
The Immediatista and Independista parties really are sub- 
divisions of the Nacionalista party. These groups were 
held together by a common expressed desire for complete 
severance from the United States. The Progresista, 
while regarding independence as a goal in the distance, 
does not favor present agitation to attain it. The strong 
Independent group is composed of men who before elec- 
tion declined to commit themselves on this proposition. 
So only two parties had expressed pre-election convictions 
sufficiently tangible to present a positive policy: The 
Nacionalista and Progresista; and the ideals which these 
represented may be cogently expressed by the customary 
appellations of Radical and Conservative. The Nacion- 
alista groups combined had a majority of seats, but by a 
narrow margin, which gave the Independent group a vir- 
tual balance of power. 

It was felt that the selection of a speaker would 
provide an intimation of what might be expected of the 
Assembly. A prominent Nacionalista candidate for 
speaker was Dominidor Gomez, a sensational demagogue 
of unsavory reputation, and clever politician and orator; 
and there is little doubt that when the time for convocation 
arrived he could have dominated a caucus of the Nacion- 
alistas. But there was a strong minority of the Nacion- 
alista party which realized that the election of Gomez 
would discredit the Assembly and impair Its prestige In 
America. With these men unreconciled, the nomination 
of Gomez by the Nacionalista party might have thrown 
the speakership to a man selected by the Progresistas and 
Independents; so the Nacionalista factions composed 
their differences, and compromised upon Sergio Osmena 



440 THE FAR EASTERN QUESTION 

as the caucus nominee. Osmefia was acceptable to the 
Conservative groups, which did not nominate any candi- 
dates, and he was elected by acclamation. 

While the hand of the Commission was not openly visi- 
ble In the election of Osmeria, there is no doubt that it 
influenced the result, which made it possible for the two 
branches of the legislature to commence their joint labors 
harmoniously. Senor Osmena was cordially received into 
the higher official circle, and at once became an important 
personage in insular affairs. Those, and they were many, 
who had expected that the Assembly would immediately 
plunge into bickering and sensationalism were disap- 
pointed. But though the first reef had been weathered, 
others remained upon which the infant legislative ship 
might strike. Fourteen seats, including that of Gomez and 
those of other prominent radicals, were protested on 
grounds that were, in some cases, seriously derogatory to 
the moral character of the delegate in question. A big 
washing of dirty personal and political linen was antici- 
pated. Here, again, the Assembly disappointed its un- 
friendly critics by disposing of its protests in a routine 
way without unnecessary fuss. It is true that this result 
was accomplished by practically Ignoring many of the 
charges, and brushing others aside on slim technical 
grounds; but it conclusively demonstrated that the Assem- 
bly had both a rudder and a pilot, and that Its crew is 
amenable to discipline. Some very clever log-rolling and 
factional trading did the business, and effected as neat a bit 
of political whitewashing as one would care to see. As 
the session progressed. Speaker Osmena demonstrated abil- 
ity coupled with unusual tact, and these qualities have 
given him great Influence over the members. 

The first session was not very old when It became evi- 
dent that party lines, as they were drawn in the election 



THE PHILIPPINE ASSEMBLY 441 

campaign, rested very lightly upon the delegates. Inde- 
pendence had been a good campaign slogan, but responsi- 
bility brought the members face to face with practical 
political matters which required action that must, if possi- 
ble, stand the test of criticism. Then it is probable that 
the body as a whole felt that it is in a sense on trial, and 
that any excess would promptly react upon it. Speaker 
Osmeiia was elected as a Nacionalista, but his course so 
far reveals him to be conservative as the most pronounced 
Progresista; and the same is true of other Nacionalistas. 
A sense of its own dignity grew upon the Assembly as the 
session advanced, which operated to check rash action. 
It has had its political ear to the ground, and Is acutely 
sensitive to external factors which affect it. 

The direct external factor, aside from Congress, is the 
Commission. The American Commissioners exercise ex- 
ecutive functions apart from their legislative duties; in 
fact, the Commission embraces all executive authority of 
the Insular Government, which is concentrated in the 
hands of the American members. So the Commission 
holds a double check upon the Assembly. It Is further 
entrenched by being able to administer Government by 
Itself should the Assembly baulk, and by not being an elec- 
tive body, subject to direct Influence of the electorate. 
The Commission can manage to wag along after a fashion 
without the Assembly, but the Assembly cannot accomplish 
anything Important without assent of the Commission in 
either or both of Its dual capacities. The Assembly can 
pass bills, but they do not become laws until approved by 
the Commission. If no new laws are passed, the Gov- 
ernment Is administered under those which exist. So 
while the Assembly has ample scope for constructive 
labor, and may retard matters somewhat, it cannot en- 
tirely obstruct. 



442 THE FAR EASTERN QUESTION 

Notwithstanding this limitation upon its power, the As- 
sembly seems to realize that the Filipino people expect it 
to accomplish something, and that public opinion will 
condemn it should it fruitlessly fritter away its time. The 
members know they must stand for reelection when their 
terms expire, or retire from the body; and so are anxious 
to gain favor with the people, and keen to note any shift- 
ing of political ideas. 

Public opinion among Americans is apt to find expres- 
sion through the Commission, but Filipino sentiment has 
set its hopes upon the Assembly, and watches its course 
with intense Interest. This condition lent interest to re- 
sults of the provincial elections of 1907. While this elec- 
tion was held too soon after the Assembly was convened 
for It to be regarded as reflecting popular opinion about 
this body, there had been time for some effects of Mr. 
Taft's visit and utterances to be felt, and to influence the 
result. The Progresistas gained six governors over the 
Nacionalistas in provinces where there were contests, 
while the Nacionalistas made a gain In only two provinces. 
In several provinces all candidates were of one party, and 
the campaign merely was a contest for the offices. In 
other provinces men who were defeated for the Assembly 
were elected governor, being able In the absence of their 
chief political rival to carry the election. In most prov- 
inces the election largely turned upon local affairs. The 
vote was much larger than was cast at the Assembly elec- 
tion; In some provinces It was more than doubled. 

On the whole, however, the Progresistas were able to 
claim victory with at least a show of plausibility; and 
Progresista leaders In the Assembly were quick to In- 
terpret the result as Indicating a popular reaction from 
radicalism, and a recession of sentiment favoring early 



THE PHILIPPINE ASSEMBLY 443 

independence. Although Nacionalista leaders disputed 
this interpretation, they were, nevertheless, somewhat im- 
pressed, and became less inclined to urge the passage of 
a resolution demanding independence. Perhaps they 
were glad of an excuse to drop the issue. 

Next to the laws it enacts, which never can be fully es- 
timated until they are tested in practice, the work of any 
legislative body may best be judged by bills which are 
introduced, and by influences which promote or obstruct 
their passage. The first of these standards cannot now 
be applied to the Philippine Assembly, but we may ex- 
amine its roster of bills introduced and follow their fate 
so far as this has developed. The first bill passed by 
the Assembly was to appropriate 1,000,000 pesos for 
erection of barrio schools; the second was to increase the 
salary of the speaker. Agriculture, taxation and educa- 
tion seemed to be popular questions with the delegates, 
and bills relating to each of these topics were presented. 
There was a bill providing for compulsory education, one 
requiring that native languages be taught in the public 
schools, one providing for further establishment of man- 
ual training classes in the schools, one providing for an 
agricultural college in each province, one to establish in- 
dustrial schools, one compelling the teaching of English 
in the barrio schools. The state of agriculture in the 
islands is evidently on the minds of many delegates, half 
a dozen bills on this subject having been introduced. One 
provides for free distribution of agricultural implements 
under certain conditions, another provides for revoca- 
tion of land sold on account of failure to pay taxes. 
There was a bill to abolish the death penalty, one to per- 
mit Chinese immigration under restrictions, one to im- 
prove insular waterways. Forty-five bills applied to re- 
vision and amendment of various laws. Six proposed 



444 THE FAR EASTERN QUESTION 

amendments to the .election law. A bill provides for es- 
tablishment of the writ of habeas corpus. 

A study of the roster of bills introduced at the first 
session of the Assembly, while it cannot completely fathom 
the personal and political motives working 'neath its sur- 
face, demonstrates that it compares quite favorably with 
measures habitually introduced in American legisla- 
tive bodies. A majority of bills were directed at some 
condition in the islands, and evidently spring from a gen- 
uine desire to accomplish something practical. Only one 
silly measure was proposed: a bill providing members 
of the Assembly with official badges to be worn in pub- 
lic. It had no chance to pass, for the Assembly seems 
to have the saving grace of humor; or a fear of ridi- 
cule. The session was not without its little private jokes. 
A member one day introduced a bill to modify and make 
less strict the law of libel. That night he chanced to be 
one of a party at a game of hurro which was raided by the 
police; or it was so reported by one of the daily news- 
papers in Manila. The indignant assemblyman promptly 
sued the newspaper for libel; but he had to endure the 
guying of his associates about his advocacy of freedom of 
the press. 

In view of its, on the whole, excellent record, the first 
Assembly may be pardoned for making some appeals to 
the gallery. Its first act was to pass a resolution thank- 
ing the President and Congress for its existence. This 
was a proper and graceful act ; but members perfectly well 
knew that it would make a good impression in the United 
States. Also in regard to passage of the barrio school 
bill, which was the first law enacted by the Philip- 
pine Legislature. The Assembly fully appreciated the 
sentimental effect its action would have throughout the 
world, and there is no doubt that this consideration ma- 



THE PHILIPPINE ASSEMBLY 445 

terially helped the measure to an early passage. The 
law, however, Is a good one; and this action shows that 
the Assembly Is conscious of the existence of an external 
check upon It In the form of International popular senti- 
ment, which Is a salutary Influence. 

Apart from Its legislative efforts, It Is Interesting to note 
some effects which the Assembly Is having upon the gen- 
eral political situation. I made, late in 1907, an exten- 
sive trip about the Islands, and was convinced that senti- 
mental effect among the people of the Inauguration of 
an Assembly Is very great. At any rate. It has pro- 
vided a diversion. People, and consequently the politi- 
cians, no longer discuss with the same interest what the 
Americanos are doing or Intend to do; they talk about 
the Assembly. What Is the Assembly doing; what Is 
the Assembly proposing to do? 

"Have you read Queson's speech?" 

"Ah, yes; but I do not agree with him. Osmena's 
reply was better." 

" The land law should be revised." 

"Yes; let us write to our Assemblyman." And so 
throughout the Islands. Demagogues who have been 
clamoring for Immediate Independence, and assuring the 
people that the American Government will never grant 
self-government to the Islands, are now deprived of a 
considerable part of their political stock In trade, and 
find It necessary to shift to other Issues, 

This popular sentiment soon reached Manila, and the 
ears of the delegates. The Assembly knows that the people 
are watching and criticizing It, that It must now and In 
the future share the responsibility for success or failure, 
that Americanos can no longer entirely be blamed for 
whatever goes wrong. Members know that In their dis- 
trict are aspiring politicians who eagerly are seeking an 



446 THE FAR EASTERN QUESTION 

opportunity to oust them and get their seats. A new ele^ 
ment has been injected into the insular poUtical game from 
the standpoint of the local politician; a new interest is 
attracting the voter, and diverting him from the illusory- 
abstract idea of independence. Regarded purely as a po- 
litic action, in the narrow sense of the term, creation of 
the Assembly is the cleverest move the United States Gov- 
ernment has yet made in the Philippines. 

There are those who attribute the good showing that 
the Assembly has so far made to uncertainty of its mem- 
bers as to its powers and limitations, and their lack of 
familiarity with roles they suddenly have been called 
upon to assume, and who predict that good behavior 
will not long continue. " Wait until about the third ses- 
sion, and you will see," Is a remark frequently heard 
among Americans in the Islands. As to this one would 
hardly care to prophesy. It Is, perhaps, too soon to 
judge the Philippine Assembly and its ultimate value to 
the islands and people; but already certain tendencies 
may be observed, and there is no doubt that a good be- 
ginning has been made. 

To many the problem involved In this experiment Is In- 
teresting entirely through its political aspects. These are 
important, perhaps in some respects dominating factors; 
but those who look to Improvement of the economic situa- 
tion of the islands for a permanent solution of political 
difficulties, and establishment of stable conditions there, 
may be more concerned about probable effect upon com- 
mercial and industrial interests. Some members of the 
American and other foreign commercial colonies in the 
islands fear that action of the Assembly will hinder indus- 
trial development by creating a condition likely to deter 
prospective investors, and to frighten away capital so 



THE PHILIPPINE ASSEMBLY 447 

badly needed to restore prosperity and open new sources 
of production. 

It seems to me that there is little substantial ground for 
such apprehension. Correct perspective in such matters is 
obtained only by comparison. For many years a large 
amount of American and other foreign capital has been in- 
vested in the so-called Latin republics, notably Mexico, 
which is considered the more stable among them. When 
all things are considered, I think that the political stability 
of the Philippines is more secure than is that of Mexico. 
Mexico now has enjoyed many years of peace and prog- 
ress, but it is generally conceded that much of the condi- 
tion which has made it possible is due to the personality 
of a single man. Mexican political stability is not sup- 
ported by any direct external authority emanating from 
a government superior in power, influence, wealth, prestige 
and administrative experience. This is the situation of 
the Philippines. Admitting that attempts to govern by 
republican institutions nations composed of certain races 
have not been uniformly successful, it is clear that condi- 
tions which have caused Instability in many cases do not 
exist in these islands to a dangerous degree. I have sev- 
eral times had opportunity to observe the operation of so- 
called popular government in the smaller republics of 
Central and South America, and what I have seen has not 
imbued me with any great faith in the present political ca- 
pacity of their inhabitants. Experience of the United 
States with Cuba is still too recent to permit unrestrained 
optimism in regard to popular government in the Philip- 
pines. But we have not yet fallen into the error there 
which wrecked our initial policy In Cuba ; the mistake of, in 
order to satisfy an impulsive and ill-considered promise and 
for the moment to escape duties and responsibilities which 



448 THE FAR EASTERN QUESTION 

rightly are felt to be onerous, committing government 
to the unrestricted care of a people without theoreti- 
cal or practical training in its administration. Nor is 
there serious reason to believe that the United States is in 
danger of making this blunder in the Philippines. In his 
address at the inauguration of the Assembly, William H. 
Taft told the Filipinos that desire on their part for ultimate 
independence of the islands is not at the present time in- 
compatible with loyalty to the Government of the United 
States; but he warned them that realization of such ambi- 
tion must wait upon acquisition of fitness to guarantee its 
preservation if granted. This statement, and similar ut- 
terances of Mr. Taft in Japan and China, In which desire 
or intention of America to sell or otherwise dispose of the 
islands was definitely repudiated, should set such fears at 
rest. 

Recognizing that the United States intends to retain 
substantial sovereignty over the Philippines for an indefi- 
nite period, and never voluntarily to relinquish it except to 
a Filipino people fully prepared for autonomy. It Is con- 
ceivable that granting legislative power to them may Im- 
prove the situation, and conditions which will attend for- 
eign Investments there. It Is too soon to predict com- 
plete practical success for the Assembly; but even If 
It should fail, in the beginning, to rise to the opportunity 
which Congress has given It, It does not necessarily follow 
that disastrous consequences will ensue. The personnel of 
the first Assembly leaves much to be desired In some quar- 
ters; but the more disreputable among the delegates Is no 
worse than men who frequently are elected to legislatures 
In America, or than some who have sat in the Congress of 
the United States. The Assembly may enact some unwise, 
perhaps some vicious laws; but are American statutes de- 



THE PHILIPPINE ASSEMBLY 449 

void of vicious and unwise laws? Anything which con- 
tributes to the satisfaction and content of the Fihplnos, 
and which is not actually pandering to foolish impulses 
and ambitions, justly may be regarded as having a tend- 
ency to promote better conditions in the islands, and to 
lead toward the goal of greater political stability. In 
this sense, then, convocation of an Assembly may have a 
beneficial effect. This hypothesis seems as reasonable as 
any advanced by those who incline to a pessimistic view. 
And It should be remembered that if the Assembly even- 
tually proves a failure, a source of senseless agitation, and 
exercises detrimental Influence upon progress toward better 
conditions, the same power which created it can dissolve it. 
One hesitates to touch what appears now to be a healing 
canker of dissension among Americans in regard to our 
fundamental policy toward these Islands and their inhabi- 
tants; but one may hope that efforts of so-called anti- 
Imperialists, when expressed in direct attempts to ex- 
cite Filipinos to efforts to gain immediate independ- 
ence, as is now being done by their agents In the is- 
lands, will be abandoned. I am unable to see how any 
good may come from this agitation. The altruistic mo- 
tives which prompt it are not appreciated at their true 
value by the people who represent the object of them; 
it serves to excite desires and ambitions which at present *5 
are unattainable, and It embarrasses the Government 
of the United States in what any candid observer 
will concede to be a sincere and unselfish attempt to up- 
lift these people. In my opinion, he who advocates im- 
mediate Independence for the Philippines or complete 
political autonomy for the Filipino people is as great an 
enemy to present progress in these islands as he who would 
grant them no voice in the management of their own 



450 THE FAR EASTERN QUESTION 

affairs. In most things it is the happy medium which 
brings more satisfactory results, and this is what the pres- 
ent pohcy of the United States is aiming to secure. 

The Philippine Assembly may fall short of the expecta- 
tions of those who now regard it and its objects with favor; 
it may even justify the poorest expectations; but one must 
lack a soul which can sympathize with aspirations of com- 
mon humanity who would wish to see it fail. Consider- 
ing the best of it, and the worst of it, in so far as these 
have yet appeared, it nevertheless deserves the best wishes 
of those who believe in republican form of government, 
and who hope for a prosperous future for these islands. 



CHAPTER XXXII 

VALUE OF THE PHILIPPINES 

Anomalous Position of the Islands — Relation of the 
Political Problem to the Economic Situation — Mental 
Attitude of Americans Toward the Islands — Possibili- 
ties FOR Development — Source of Supply for America — 
Hawaii and Porto Rico — Some Comparisons — America's 
Economic Attitude — Reasons for This — Obstruction- 
ists in America — Injustice to the Islands — The Re- 
fusal TO Grant Free Trade — Opposition in the Philip- 
pines — Political and Economic — The Question of Reve- 
nue — Example of Porto Rico — Natural Resources — 
Capital Needed — The Islands not a " Burden." 

Although the Philippines really are part of the United 
States and entirely subject to its sovereignty, there still is 
disposition in some quarters to regard them as a separate 
entity, to be played with, patted on the back or neglected 
according to the whim of Congress. Yet so long as we 
exercise control over their destiny, their troubles and dif- 
ficulties will be ours, and any material prosperity they may 
enjoy will accrue to the benefit of the nation. Conditions 
in the islands, and possibilities for their development, are 
therefore entitled to equal consideration with other parts 
of the national domain, and should even be the especial 
concern of the Government. 

Even cursory investigation of conditions in the Philip- 
pines reveals that a great factor of what is called the 
political problem can be traced to the economic situa- 
tion. Here, as elsewhere, political unrest rarely becomes 

451 



452 THE FAR EASTERN QUESTION 

acute except during commercial and industrial depression. 
Practically speaking, Congress holds the prosperity of the 
islands in the hollow of its hand; which means that it has 
the power to strike, by peaceful means, at political forces 
which complicate the work our Government is perform- 
ing there, and to render them to a great degree ineffective 
to retard or embarrass it. 

Most economic questions have several bearings; and 
relation of the Philippines to the future of the United 
States should be considered as to possible effects both upon 
the islands and upon the homeland. Many people in 
America have not yet become accustomed to regard the 
Philippines as part of the nation, and while they would 
be glad to learn of their prosperity, they feel about it just 
as if it was Venezuela; that is, not a matter about which 
they especially need to concern themselves. This is a 
demoralizing and erroneous conception of our national re- 
sponsibility to the islands and their inhabitants, and it 
probably will not entirely disappear until it is fully real- 
ized that advancement in the Philippines means corres- 
ponding advance in our material prosperity at home, and 
that depression in the islands means a positive burden 
upon our national resources. 

In considering some possible effects of development of 
natural resources of the Philippines upon trade and in- 
dustry of the United States, some interesting matters at 
once suggest themselves. A report of the Department of 
Commerce and Labor shows that in 1906 more than $500,- 
000,000.00 worth of tropical and semi-tropical products 
were imported into the United States. A majority of 
these products cannot successfully be produced in the 
United States, or when climatic conditions will permit 
their production, economic conditions are more favorable 
to production of other crops. Tropical and semi-tropical 



VALUE OF THE PHILIPPINES 453 

products are essential to the comfort and convenience of 
the American people, and include coffee, sugar, tea, cacao, 
copra, rubber, hemp, jute, tobacco, fruits, nuts, spices, 
gums, dye woods, hard woods, and many other articles 
used in manufacturing, or daily consumed at American 
dinner tables. In exchange for these articles the United 
States exports products, chiefly manufactures, to the extent 
that they are consumed in countries whence such supplies 
are drawn, and in proportion to the extent to which Ameri- 
can products can compete In those countries with similar 
products from other manufacturing nations. In many of 
these countries the United States is now at commercial dis- 
advantage in that nations which compete with the products 
it might sell there enjoy more favorable terms of entry, 
or natural advantages which it never may be able to over- 
come. In regard to countries which produce tropical and 
semi-tropical products cheaply and in large quantities, the 
general proposition may be laid down that the present 
area of the United States proper never economically can 
compete with those countries In production of such articles. 
It also Is generally true that natural conditions in those 
countries are not favorable to the profitable production of 
food-stuffs and manufactured articles stable in the world's 
trade, such as are the basis of America's Industrial pros- 
perity. 

With these facts In mind, it Is Interesting to consider the 
possible relation of the Philippines to the economic and 
commercial problem here presented. These Islands are 
almost entirely located in the tropics. They produce 
now in some degree, and are capable of producing large 
quantities of almost all tropical and semi-tropical products 
which are consumed In the United States. Some brief 
comparisons may afford an Idea of the field for de- 
velopment along this line which these Islands pre- 



454 THE FAR EASTERN QUESTION 

sent. Hawaii exported in 1906 $36,000,000.00 worth 
of products. The area of the Philippines is over eighteen 
times that of Hawaii, and the population fifty times as 
great; yet in the same year the Philippines exported less 
than $34,000,000.00 of products. Porto Rico, with 
one-fortieth the area of the Philippines, now produces 
nearly three-fourths as much. Since the United States 
annexed Porto Rico, and gave products of that island a 
free market in the States, its production of tropical prod- 
ucts has more than doubled. Since American capital and 
methods were introduced into Hawaii, about thirty years 
ago, production In those islands has increased thirty fold. 
Both Hawaii and Porto Rico are now part of the United 
States in fact as well as in name ; yet with all their progress 
they are able to supply the States only with one-tenth of 
tropical and semi-tropical products which they use. 

The proposition has another bearing. Since modifica- 
tion of the tariff upon Hawaiian products Imported into 
the United States, In 1875, the sale of American products 
in the islands has been multiplied by thirty, or has In- 
creased In almost exactly the same ratio as have products 
of the Islands in the same period. The United States 
exports ten times as much to Porto Rico as was done In 
years which preceded annexation, now sending to the 
island 88 per cent, of Its total Imports. Since the Philip- 
pines were acquired by the United States, or since normal 
conditions were partially restored by suppression of the 
Insurrection, In 1901, the total foreign trade of the Is- 
lands gradually has crawled to $59,000,000.00, as against 
$54,000,000.00 In the last year of the Spanish regime; 
also a period, by the way, of internal unrest and disorder. 
This practically Is no progress. In 1906 only 17 per 
cent, of Philippine imports came from the United States. 
At the same per capita rate of consumption as Porto Rico, 




New Provincial Model School, Philippines. 




Typical Municipal Building in the Provinces. 



VALUE OF THE PHILIPPINES 455 

the Philippines would have imported in 1906 from the 
United States about $157,000,000.00 worth of merchan- 
dise, as against $4,477,886,00 which was consumed. The 
area, soil, climate and population of the Philippines war- 
rant assumption that the islands might in time produce, 
with its other tropical possessions, practically all tropical 
and semi-tropical products which the United States will 
require. This would mean corresponding increase in the 
purchasing power of the Filipino people. Having politi- 
cal control of the islands means that the United States can 
regulate circumstances under which merchandise may be 
imported, and easily can establish conditions favorable to 
American products in comparison with competing products 
originating in other manufacturing nations. 

Viewed as a step toward establishment of substantial 
economic Independence, by creating under a central gov- 
ernment an almost complete productive cycle, such a 
scheme might well engage the attention of American states- 
men. As a business proposition, is not an annual trade 
of from $600,000,000.00 to $800,000,000.00 with the 
Philippines worth considering? Such possibilities are in- 
cluded in the future of the islands. Why, then, does the 
United States pursue a fiscal policy toward the Philippines 
which lends small active encouragement to development, 
and which in some matters positively hinders It? 

The answer Is that certain influences have been exerted 
to obstruct progress toward Improvement of the economic 
situation of the islands. These influences are various and 
somewhat complex; but they fall into groups which makes 
it possible to identify and analyze them. Of these groups, 
undoubtedly the more active and potent is composed of 
protected interests in the United States, which pro- 
fess to see danger to some industries in America if the 
tariff wall be opened to admit Philippine products. The 



456 THE FAR EASTERN QUESTION 

economic basis for arguments presented by this group is 
so slight that it hardly could have prevented action by 
Congress had not it been able to obscure real issues by in- 
jecting into the discussion a lot of confusing and more or 
less irrelevant matters. To this end a campaign of mis- 
representation was waged. The islands have been repre- 
sented as a tremendous financial burden upon the nation; 
difficulties of the political situation were grossly exagger- 
ated; and all the incongruous elements which, for many 
and diverse reasons, oppose our policy there, were rallied 
into a common army of obstruction, which so far has been 
able to prevent remedial legislation by Congress. 

Those first entrusted with the administration of these is- 
lands quickly realized that their acquisition by the United 
States Government must affect Philippine commerce and 
industry, through alteration of international relations and 
consequent modification of conditions which apply to for- 
eign trade. It was the policy of Spain to exploit the is- 
lands, as far as was possible, for advantage of the mother 
country ; certain industries and production were stimulated, 
others discouraged, with a view to benefit Spain rather 
than the islands. It was evident that alteration of the 
system, by depriving Philippine products of advantageous 
markets in some quarters, would compel them to seek 
markets elsewhere. This caused, in the beginning, no 
uneasiness; for what mattered the loss of a narrow and 
restricted market if entry into the immeasurably greater 
one of the United States was gained thereby? 

When the need for some relief was urged upon Con- 
gress, a bone was thrown to the islands by conceding a 
reduction of 25 per cent, of the Dingley schedules to Phil- 
ippine products entering the United States. It soon be- 
came evident, however, that this concession was of slight 
benefit; and when W. H. Taft became Secretary of War 



VALUE OF THE PHILIPPINES 457 

he urged Congress to grant free trade between the Phil- 
ippines and the States, as was done with Hawaii and 
Porto Rico. A bill was introduced, granting further re- 
duction of 50 per cent, of the Dingley tariff until 1909, 
when free trade should become operative. This measure 
passed the House of Representatives by a large majority, 
but antagonistic interests succeeded in having It killed 
in the Senate. Free admission of sugar was the real 
stumbling block, and the character of opposition Is indi- 
cated by its attitude In this matter. The sugar Interests 
professed to be willing to admit Philippine sugar free if 
annual importation be limited to 400,000 tons. As the 
entire output of the Islands cannot reach this figure for 
probably twenty years, even under favorable conditions, 
it Is evident that alleged peril to American Industry from 
this source Is more imaginary than real. 

Although effective opposition to legislation to benefit 
the Philippines centers In the United States, It receives 
considerable indirect support from elements in the Islands. 
This support springs from two sources — political and 
economic. Political opposition comes from those ad- 
vocates of Philippine Independence who fear that if the 
Islands ever become too closely attached to the United 
States, by ties of commercial and Industrial reciprocity, 
hope for a Philippine Republic will vanish. There Is ex- 
cellent ground for this anticipation. Increased prosperity, 
closer relations with America, Introduction of capital, and 
forces brought Into play by such conditions undoubtedly 
will be destructive to sentiment for severance by altering 
circumstances which now give such arguments plausi- 
bility In both countries. The Filipino politician who 
would prefer a poor and feeble Philippine Republic to a 
secure and prosperous dependency of the United States Is 
ubiquitous in the Islands, just as Americans who oppose 



458 THE FAR EASTERN QUESTION 

broader national Interests for personal gain are plentiful 
at home. 

Nor do such men, some of whom are sincere and patri- 
otic, lack present arguments. About two-thirds of insular 
revenue is now secured through the custom house. It is 
pointed out that with free trade with the United States 
the islands will lose revenue on articles now imported 
from America, and admission of American products 
free also will tend to displace other foreign products in 
the islands, and thus cause further loss of revenue. It 
is estimated that free trade with the United States 
may cause a loss of customs revenue to the Philippine Gov- 
ernment of three-fourths of present customs receipts. If 
this should prove true, the deficit must be met by creation 
of other revenues, and this idea frightens Filipino politi- 
cians, and causes uneasiness to the Commission. Human 
experience has demonstrated that while indirect taxation 
is wasteful, it is the easiest way to get money out of peo- 
ple. A serious loss of revenue from the customs might, 
so many persons in the islands fear, compel the Insular 
Government to resort tO' direct taxation; which some pre- 
dict cannot be done in the present state of the islands 
without exciting internal disorder. 

- While these views are not without reason, a study of 
the insular budget, and the situation of the islands, causes 
apprehension to recede. When the present internal reve- 
nue law was put into effect it was freely predicted, espe- 
cially by prominent Filipinos, that it would cause disaster 
to Philippine industries, and probably incite resistance 
among the people. These anticipations were not reahzed. 
There were slight disorders, due to mistaken agitation; 
but these have entirely passed, while industries which ob- 
jected to the law have felt no ill effects. It is reasonably 
certain that insular revenue can be ;naterially increased 



VALUE OF THE PHILIPPINES 459 

from other sources should customs receipts fall off. In 
respect to this question, there is almost an exact parallel 
in the case of Porto Rico. In establishing free trade be- 
tween the United States and that island, practically the 
same situation was encountered. The result has been 
that while trade between the island and America has 
greatly increased, and American products now nearly 
monopolize the Porto RIcan market, the customs receipts 
are now 70 per cent, of what they were before the change 
was made, and are steadily increasing. The reason for 
this is quite clear. Many articles brought from Europe 
and other countries are liked and desired by the people 
on account of their quality and character, and with in- 
creasing prosperity they have continued to buy such arti- 
cles for their gratification, while at the same time buying 
American products which formerly they had not used at 
all. There Is reason to think that such a result would 
follow free trade with the Philippines. 

An argument one hears in the islands Is that free 
Importation of American products like, let us say, agricul- 
tural machinery needed to develop natural resources of 
the country, will not have the effect of cheapening such 
articles to Philippine consumers, and may add to cost of 
production. Some Important articles of American origin 
now consumed In the islands, or for which a demand may 
be created, are known at home as " trust " products, and 
have protection by the present tariff, which enables them 
to get a higher price in the home market than can be ob- 
tained In other countries. It Is commercial custom in the 
Philippines, as In many countries, for American manufac- 
turers of these products to grant rebates to their agents 
equal to the Insular tariff they must pay. Commercial 
firms which Import such American products believe that if 
the present Insular tariff on these goods Is removed, manu- 



46o THE FAR EASTERN QUESTION 

facturers, having then a " home market " In the Phihp- 
plnes, will no longer grant rebates; with result that in- 
stead of getting goods cheaper, the Filipino consumer 
will pay even more than he now does, beside losing reve- 
nue. Some effects of free trade with America thus might 
be detrimental to the islands. 

In the multiplicity of interests involved, and the widely 
divergent angles from which the subject Is viewed, Is 
ample ground for difference of opinion; and it Is not 
strange that advocates of " justice for the Philippines " 
should be somewhat divided In their councils, which op- 
erates to the advantage of obstructionists by obscuring the 
vital issues Involved. The situation really presents no 
extraordinary complexities when the major elements are 
considered. And these stand out above turmoil created 
by the clash of petty Interests and narrow views. 

The geographical location of these Islands, their soil, 
climate and natural resources definitely Indicate that de- 
velopment must fundamentally be based upon agriculture. 
Regarding natural advantages found in the islands for the 
production of tropical and sub-tropical crops, one finds 
It necessary to exercise repression In describing them for 
fear of being suspected of exaggeration. Here, indeed, 
nature has lavished her favors. No complete computa- 
tion of agricultural statistics has been made, but experts 
estimate that 80 per cent, of the total area of the Islands 
can be made productive. The greater part of this beau- 
tiful region has not been touched. It requires only the 
Intelligently directed effort of man to contribute Its quota 
to the sum of human wealth. Under modern conditions, 
two main factors are essential to such effort: capital and 
labor. The state of labor In the Islands Is a matter which 
deserves notice ; and It may be said that the present supply 
is ample for a considerable development. Conditions 



VALUE OF THE PHILIPPINES 461 

which deter the introduction of capital are the chief pres- 
ent economic handicap to the islands. 

While many minor conditions contribute their influence 
to discourage capital from entering the Philippines, there 
is a central cause for its present timidity. This is un- 
certainty about the present and future political status of 
the islands. Mr. Taft's definite declaration, In October, 
1907, that the Washington administration has no idea of 
letting go of the islands helps to set at rest one cause for 
uneasiness; but much remains to be done before capital 
will find there an inviting field for investment. People 
who, recognizing the remarkable natural opportunities af- 
forded, would like to invest in agricultural or other pro- 
duction In the Philippines want first to be assured of sta- 
bility of the general conditions which will affect their 
Investments. If they desire to open hemp plantations, or 
to invest in rubber land, they want to feel reasonable as- 
surance of the political stability of the country, and also 
that economic conditions surrounding production and mar- 
keting of their products will not suddenly be changed. 
In other words, capital Is willing to enter the Philippines 
on the merits of natural advantages offered; but In esti- 
mating chances of profit or loss it wants to know where the 
islands stand, at least for a definite period; whether they 
are in or out of the United States; whether the same 
general conditions which attend development In America 
also may be expected to apply there, or, if not, what con- 
ditions will apply. Given this assurance, there is no 
doubt that ample capital for development of the Islands 
can be secured. 

Nor will capital be so hard to satisfy in this respect as 
some seem to anticipate. Several factors bear upon the 
proposition: the attitude of the Insular Government and 
the policy of Congress being essential ones. In the end, 



462 THE FAR EASTERN QUESTION 

the policy of the Insular administration must follow direc- 
tion of the President and Congress, but it always will 
greatly influence the course of events, and this gives im- 
portance to its attitude toward capital which seeks in- 
vestment in the islands. Our nation is committed to a 
policy which substantially will conserve the interests of 
the inhabitants, and protect them against external efforts to 
exploit them for advantage of foreigners, which frequently 
Is a result of similar relations between a great power and 
weak, alien peoples and possessions. This has caused re- 
jection by the Commission of some ambitious projects de- 
signed to attract capital on the ground that they involved 
a sacrifice of interests of the natives. The spirit which 
prompts this policy is excellent, and the policy is a good 
one; but if the islands are to be developed, which will in- 
crease general prosperity, the idea of protecting interests 
of the natives should not be permitted to operate to ex- 
clude legitimate enterprises. 

To draw foreign capital to the Islands It Is necessary 
to make Investments there more attractive than now can 
be found elsewhere. This may be done through any or 
all of the circumstances which affect Investments: political 
stability, security, and the profits promised. Where risk 
Is believed to be greater, capital demands greater prospec- 
tive profits. In the beginning, It probably will be neces- 
sary to make the Philippines attractive to capital by offer- 
ing greater opportunity for profit In comparison to coun- 
tries of similar natural advantages; for, even with favor- 
able action by Congress, all doubts concerning the stability 
of other factors will not Immediately vanish. Here Is a 
chance for exercise of wisdom and discretion by men who 
administer Insular affairs. One Is glad to note that pres- 
ent prospects are, on the whole, distinctly favorable. 

Whether these Islands shall progress, stand still or drift 



VALUE OF THE PHILIPPINES 463 

backward depends upon Congress. A reduced tariff bill, 
with amendments designed to meet views of the more rea- 
sonable opposition, should be passed. Such a measure,' 
while not to be regarded as a panacea, promises substan- 
tial benefit, and will go far to clarify the economic status 
of the islands. It also would be wise for Congress to 
amend the law permitting the establishment of an agricul- 
tural bank so as to make the proposition more attractive to 
capital. It has been pretty conclusively demonstrated that 
American capital will not take up the project in its present 
shape, and the islands are suffering for the relief which 
such an institution will afford. The land laws, which 
limit the area that can be acquired by a single entity, dis- 
courage enterprises which require large tracts of land, 
without preventing innumerable petty evasions of its let- 
ter and spirit, and should be amended. 

So we find that action by Congress on a few matters 
will give substantial relief to the Philippines, and set in 
motion forces which will in tim.e, perhaps quite soon, place 
the islands firmly in the path to prosperity. If this hap- 
pens, Americans will hear less about their being a " bur- 
den " and " problem." These words have been sadly 
overworked in this connection. Observation of conditions 
there has convinced me that when one finds a person who 
always refers to the Philippines as a " burden " or 
" problem," one only has to probe a little to discover in 
that person one who is laboring, directly or indirectly, to 
make the islands deserve these appellations. Let Con- 
gress act intelligently and fairly, and in the future we will 
hear little about the Philippines being either a burden or 
a problem. 



CHAPTER XXXIII 

VALUE OF THE FHILIPPINES — Continued 

State of Labor in the Islands — Fallacies Regarding 
Filipinos — Shallow Conclusions — Early American Ex- 
periences — Expectation and Fulfillment — False 
Standards — Erroneous Ideas — Filipino Peculiarities — 
Kind of Labor Needed — Experience of Large American 
Firms — Bending American Methods to the Filipino — 
Results Versus Methods — The Philippine Railways 
— Experience in the Visayas — Organization and 
Method — Native Prejudices Respected — Economic Re- 
sults OF This Policy — Gradual Improvement — Me- 
chanical Aptitude of the Natives — Wages in the 
Islands — Filipinos Amenable to Environment. 

Speaking of some effects of American policy In the 
Philippines, Senor Antonio Regldor, who returned from 
exile to be present at the opening of the Assembly In 1907, 
said: 

" Teach our people the dignity of labor. Teach them 
how to work." 

That the venerable Filipino patriot touched a funda- 
mental factor In progress In the Islands cannot reasonably 
be disputed. " The trouble with the Philippines Is that 
the natives won't work," has been repeated so often that It 
almost has hardened Into a proverb ; and probably none of 
detrimental reports which have been circulated about these 
islands has had more effect in hampering their develop- 
ment, by discouraging Investment of capital. But is it 

464 



VALUE OF THE PHILIPPINES 465 

true that satisfactory labor cannot be had In the PhiHp- 
plnes? 

The answer to this question turns upon several matters, 
and invites examination of conditions In which this idea 
originated, and elements which apply to It. Many Amer- 
icans who reside In the islands believe the theory thus 
advanced. Inquiry reveals, however, that much of such 
comment is based upon superficial knowledge of the facts, 
and slight consideration of them. One frequently hears 
American and foreign residents of the islands, especially 
In Manila, inveigh against the Ignorance and carelessness 
of native servants and employes, as examples of general 
Filipino Incompetency. But one hears similar animadver- 
sions anent the servant problem in the United States; yet 
no one familiar with our country would think of conclud- 
ing therefrom that Americans are destitute of Industrial 
capacity. 

So to estimate the Industrial capability of FIHpinos it 
is necessary to inquire of persons who have employed them 
on a large scale, through a considerable period of time, 
and who are able, from previous experience with similar 
labor in other countries, to compare results. These 
results turn upon various elements; but judgments derived 
from them depend upon comparative efficiency, and the 
economic measure of efficiency Is the equation between 
work accomplished and Its cost. 

It may be conceded that early experience with native 
labor In the Philippines was attended by unsatisfactory 
results to American employers. Satisfaction In such cases 
is measured by what an employer gets in comparison with 
what he expects, and disproportion may be caused by 
variation of either or both factors. An employe may 
give too little, and an employer may expect too much. In 
early days of American occupation, the American employer 



466 THE FAR EASTERN QUESTION 

of Filipino labor unconsciously measured it by American 
standards of quality, as expressed in the output of human 
units, not then having become familiar enough with indus- 
trial environment of the East to reckon the real worth 
of labor as expressed in cost of production. Moreover, 
the average American employer, imbued with a sense of 
superiority which was a result of political conditions, 
was Intolerant of native methods, and usually Insisted on 
having things done as Is customary In the United States. 
Thus forced along unfamiliar channels, Filipino labor was 
not able to meet expectations. Its efficiency was measured 
by a false standard, and, moreover, suffered actual depre- 
ciation from being badly directed. Thus, In the begin- 
ning, most Americans not only expected too much of 
Filipino labor, but actually helped to diminish Its cus- 
tomary efficiency by Imposing upon it unfamiliar methods 
and implements, and by not understanding or refusing to 
consider Its sociological peculiarities. 

Several matters contributed to start American manage- 
ment of Filipino labor off wrongly. One was our Idea 
that we can hustle the East. In the beginning Amer- 
ican theory for rapid development of the Islands was 
quickly to introduce American methods. This theory Is 
excellent In Itself, but It was destined to suffer reverses 
In the process of practical application. Industrial meth- 
ods anywhere are Interdependable, and are rendered effi- 
cient or Inefficient by conditions and circumstances which 
circumscribe them. This economic rule applies In the 
Philippines as elsewhere; but In Introducing American In- 
dustrial methods there It was common, one may say usual 
to fail to consider the whole combination of collateral con- 
ditions which must aifect their net result. Americans 
continually made mistakes of this character, by falling to 
consider some Important element of fost, by Introducing 



VALUE OF THE PHILIPPINES 467 

expensive machinery which could not economically be 
used; and then blamed their failures upon Filipinos, and 
upon the native laborer in particular, when they often were 
due to lack of foresight and judgment in themselves. 

It cannot reasonably be denied that Filipinos, as work- 
ers, have peculiarities which are excessively irritating to 
the average American employer, especially to one just 
from the United States. Their Indolence, their disposition 
to " lay off," their fondness for fiestas, and their slight 
physique have become familiar to people in the United 
States through constant Iteration. Nature plays a part in 
shaping this disposition. The picture of a Filipino sleep- 
ing under a tree surrounded by edibles, which he only has 
to pluck to satisfy his needs, has come to represent to 
many the native conception of work. This picture is com- 
posed of partial truths, and the Idea that the average 
Filipino cannot be Induced to work has been refuted dur- 
ing the last few years. 

In considering the question of labor In the Philippines 
as an economic factor, the kind of labor needed to de- 
velop resources of the islands must be kept in mind. 
While there now are Incidental manufacturing enterprises, 
and others will grow as concomitants of increasing pro- 
duction, agriculture always will be the chief industry of 
the islands; and agriculture requires a large proportion of 
unskilled labor. Indeed, it seems that now and In the 
future progress of the Islands requires a large amount of 
dependable unskilled labor rather than skilled labor; and 
in this connection some results already secured with un- 
skilled kbor under American management are interesting 
and significant 

The more extensive experience with native unskilled la- 
bor in the islands has been that of large contracting com- 
panies which operate there. There are several of these; 



468 THE FAR EASTERN QUESTION 

and the more important are J. G. White & Company, and 
the Atlantic, Gulf & Pacific Company. Both these firms 
have undertaken large construction works in the Philip- 
pines; the former the Manila Street Railways, the Philip- 
pine Railways, the Cebu harbor improvements and other 
contracts; the latter the Manila port improvements, the 
Luneta extension and other things. All these works have 
been carried on with native labor under American supervi- 
sion, involving the simultaneous employment of many 
thousands of Filipinos; and the estimate which their man- 
agers have formed of the Filipino as a worker is based 
upon actual experience with him under a variety of con- 
ditions, and extending over a period of several years. 

This experience has not been free from disagreeable 
incidents. Notwithstanding that these companies have at 
their command the best professional talent, and came to 
these islands fortified with ample experience in large un- 
dertakings elsewhere, they found it necessary gradually to 
re-shape their methods to suit conditions here. This de- 
cision was reached only after the men on the job had tried 
to introduce innovations, with unsatisfactory results. 
Their experience has been a process of experiments in try- 
ing to get the best results from native labor, a succession 
of compromises between so-called American methods and 
conditions peculiar to this country and people. With re- 
sults rather than methods always in mind, they are evolv- 
ing a system which Imposes upon Filipinos as much of 
American method as they can assimilate and employ to ad- 
vantage, while permitting them to follow their natural bent 
in others. In short, it has been found easier in many 
matters to adapt the method to Filipino laborers than to 
bend them to it. 

Construction of the Philippine Railways probably pro- 
vides the best available Illustration oi what may be done 



VALUE OF THE PHILIPPINES 469 

with native labor. These railways lie entirely in the 
Visayas. In respect to such undertakings at Manila, 
which is the industrial center of the islands, and where 
such industrial capability as the people possess has reached 
its highest state of development, it is contended that 
results obtained there are above the average, and that 
experiments in other places would be less favorable. In 
the Visayas constructors of the Philippine Railways are 
compelled to draw their labor almost exclusively from the 
agricultural element of the community, and results ob- 
tained there may fairly be assumed to represent an aver- 
age capable of being sustained throughout the islands. 

In beginning railway construction In the Visayas, J. G. 
White & Company had the advantage of Its experience in 
Luzon. Conditions In Cebu, Panay, and Negros gen- 
erally represent the state of labor throughout the islands. 
These islands are almost exclusively agricultural, and la- 
bor for construction work had to be drawn from planta- 
tion hands and small farmers. Most of these are In- 
dependent in the sense that they can exist without reg- 
ular employment and, consequently, have been In the 
habit of working only when they feel like it. Many per- 
sons familiar with conditions predicted that J. G. White 
& Company would not be able to get enough labor to carry 
on the work satisfactorily. Certain difficulties could 
be definitely foreseen. The work involved use of unfa- 
miliar tools, and could only be carried on by organization 
such as the natives had no previous experience with. 

One evil attendant upon employment of labor in 
the Philippines is the existence of a counterpart of the 
padrone system in the capitas. A capitas is petty boss of 
a gang of fifteen to twenty men, who manages it, ar- 
ranges about wages and Is responsible for Its work. 
When American contracting firms first came to the islands 



470 THE FAR EASTERN QUESTION 

they tried to eliminate the capitas, but results were so un- 
satisfactory that the effort was abandoned, and reform 
limited to curtailing the worse evils of the system. J. G. 
White & Company's construction work in the Visayas is 
organized in camps, each under the supervision of a for- 
eign foreman. The camps are divided into divisions of 
from forty to sixty men, each under a foreign sub-fore- 
man; and divisions are composed of several gangs each 
under its own capitas. By this system more than 4,000 
natives have worked simultaneously and without delay or 
friction in Cebu, where railway construction is further ad- 
vanced. 

In thus creating an efficient working force out of abso- 
lutely raw material, the construction managers laid the 
foundation for success upon these propositions : fair wages, 
and protection of the laborer from being " squeezed " out 
of part of his pay; good and sufficient food; non-interfer- 
ence with native customs and habits except when absolutely 
unavoidable, and then with tact and discretion ; using only 
native bosses in directing common laborers while at work ; 
endeavor to make the men understand that the company 
is concerned about their welfare and Is Interested In Im- 
proving their condition. 

The economic results of this policy, so far as they have 
developed, are extremely interesting. A principal factor 
in railway construction is the moving of great quantities of 
dirt, Involving the use of excavating tools and means of 
transport. At first baskets were used to carry dirt In the 
Visayas; then It was decided to introduce the wheelbarrow, 
an implement practically unknown to Filipinos before 
the advent of Americans. At first It was found that 
men were unable to carry more than half a load. This 
was partly due to awkwardness and partly to lack of 
strength In the arms and shoulders., But the managers 




u 



VALUE OF THE PHILIPPINES 471 

persisted, gradually increasing the loads, until now the 
men haul full loads without difficulty. A disposition 
to get tired easily and loaf in their work, which for- 
merly was such an aggravating habit of common Filipino 
laborers, also is being counteracted. Better nourishment 
is partly responsible for this improvement, due to good 
food and sanitation, and supervision has had an influ- 
ence. No foreign foreman is permitted to give an 
order to or hustle a native during working hours. Neces- 
sary orders are transmitted to the men through the 
native capitas, and if a foreman notices that a workman 
loafs habitually, the capitas quietly is Instructed to re- 
place him with another man. In this way frictions be- 
tween foreign overseers and natives, which formerly were 
so numerous and often were the cause of serious labor 
troubles, are now almost entirely prevented. An Ameri- 
can labor overseer who believes In the rough methods of 
maintaining discipline which are often used at home Is use- 
less In the Philippines, and Is not wanted. Large em- 
ployers of labor In the Islands will now discharge a foreign 
superintendent or foreman who shows a disposition to be 
arrogant and truculent with natives. To strike a native 
workman means Instant discharge. Men who direct this 
work have come to realize that patience and consideration 
will go much further In handling native labor than rough 
displays of authority, and a foreign foreman or superin- 
tendent who cannot adapt his conduct to this theory Is use- 
less. This policy does not accord with some so-called 
American Ideas of dealing with Filipinos, but It is pro- 
ducing good economic results. 

Under this treatment the native laborer is undergoing 
an evolution. A man who formerly would work an aver- 
age of perhaps three days in a week, now will work five or 
six days. Where he used to knock off on every little feast 



472 THE FAR EASTERN QUESTION 

day, he now lets many of them pass, and sticks to his job. 
This change of disposition is significant, for it is an indica- 
tion that habits which have in the past been detrimental 
to industrial progress are not so deeply encrusted as was 
thought, but will yield to tactful application of the same 
forces that elsewhere stimulate humanity to new efforts. 
In early days of American experiments with Filipino com- 
mon labor, if a workman quit in the middle of the week 
part of his pay was withheld, and he was refused employ- 
ment when he applied again. This system is feasible 
where it is understood, but Filipinos do not under- 
stand it, and its application caused such dissatisfaction 
that it was necessary to modify it. In railway work 
the men are paid by the day, and are paid in full whether 
they work six days or one day in a week. 

If Pedro wants to attend a fiesta or go fishing he does 
so, and when he again reports he is put to work without 
comment if there is a vacancy, and his desertion is not 
scored against him so far as he can tell. But Jose is 
Pedro's neighbor, and Jose is of a more industrious habit. 
He works regularly. In time Jose's wife has a better gown 
than Pedro's wife; his children wear shoes and stockings, 
and have some other little luxuries which Pedro's wife 
and children cannot afford. Some day when Pedro re- 
turns to work after a brief vacation without leave, he 
finds his place on the gang taken by a new man. Is he 
discharged ? He would have been five years ago ; but now 
he is not. He is told to come around, and when there is 
a vacancy he will be put to work again. This occurs a 
few times; Pedro's wife begins to remark upon her posi- 
tion as compared to that of the wife of Jose, who always 
works. Pedro does not find loafing so satisfactory as 
it used to be; he begins to regard his job as a good thing, 
and thinks twice before he runs the risk of being crowded 



VALUE OF THE PHILIPPINES 473 

out of it. The influence of these adapted American 
methods is being strongly felt wherever they have been 
introduced in the Philippines, and they are planting the 
seed which may, aided by other educational forces, grow 
into tangible realization of Senor Regidor's exhortation. 
From the standpoint of the employer, results have been 
equally satisfactory. Notwithstanding that to secure 
labor some American firms were compelled to pay higher 
wages than was usual, amounting to an average increase 
of 50 per cent., many kinds of work are now done much 
more cheaply than is possible in the United States, and 
very much more cheaply than white labor can do the work 
in the Philippines. In railway construction, for instance, 
a white laborer in America will move half as much more 
dirt in a day than a Filipino does, and he is paid four to 
five times as much to do it. The Filipino as a workman 
has serious defects, but most of them readily yield to tact- 
ful pressure, and the stimulating influence of environ- 
ment. The Manila & Dagupan Railway, a British cor- 
poration, and the Manila street car system conclusively 
have demonstrated that natives make fairly competent 
operators. They have great imitative mechanical in- 
genuity, but seem to lack industrial initiative. In the 
field of skilled labor, they show good progress in many 
branches. An old-time Spanish Friar once said that the 
brains of Filipinos are in their fingers. An idea of 
what can be accomplished by native skilled labor may 
be had by a visit to the printing plant of the Insular 
Government in Manila, where all kinds of advanced print- 
ing and engraving is done by Filipinos under American 
direction. Several hundred Filipino youths now attend 
the School of Arts and Trades in Manila, and industrial 
work, already an important branch in the insular school 
system, is being extended. 



474 THE FAR EASTERN QUESTION 

I regard it as an encouraging sign that of the many 
Americans who employ Filipinos on a large scale whom 
I questioned about their capacity, not one gave a pessi- 
mistic account of them. On the contrary, men who from 
actual experience should know most about the propo- 
sition believe that a fair degree of industrial efficiency 
and reliability in Filipinos can be developed by in- 
telligent and painstaking effort. Richard Laffan, E. J. 
Beard, John Leech, and their associates in pioneer con- 
struction and mechanical operating work In the islands, 
may in time be credited with having laid the foundation 
for reorganization of the industrial system of the islands. 

It is interesting to note some incidental effects of Amer- 
ican industrial activity in the Islands. One hears com- 
plaint among Filipino planters about the scarcity of labor. 
When analyzed, however. It appears that what is called 
scarcity really means that labor Is becoming disinclined 
to accept the terms offered. In the past the tao groaned 
under the oppressions of caciqueism, by which he was 
mulcted of any surplus proceeds of his labor, and thus 
deprived of incentive to work. When the Philippine Rail- 
ways, In order to Induce natives to undertake unfamiliar 
and wearisome work, advanced wages In the Visayas from 
50 to 75 centavos a day, It caused a strong protest by 
the planters, who still are disgruntled, notwithstanding 
experience has demonstrated that double result is secured 
by this policy at an Increase of 50 per cent, in pay. The 
truth seems to be that a large segment of old-time planters 
do not want the native laborer to progress, for this will 
mean his emancipation from the Industrial semi-slavery 
under which he previously existed. If the planter pays 
higher wages, he himself will have to work harder to 
get value out of his labor; and the average planter in 
the Philippines has become so accustomed to the old order 



VALUE OF THE PHILIPPINES 475 

of things that he regards any change with apprehension 
and disfavor. But careless, slipshod ways are doomed. 
They will In time, as the tao learns his rights under the 
law and, shaking himself free from the shackles of cacique- 
ism, acquires Industrial energy and efficiency under stim- 
ulation of Increasing desires and greater rewards, be re- 
placed by better methods. 

There Is little reason to doubt that Filipinos will respond 
to such a stimulus; indeed they already are beginning 
to look to Americans to provide opportunity for material 
improvement. Should the United States pursue an eco- 
nomic policy toward the Islands which will encourage their 
development, there Is small chance that the question, 
" Will the Filipino work? " will permanently be answered 
in the negative. 



CHAPTER XXXIV 

VALUE OF THE PHILIPPINES — Concluded 

Adverse Conditions — Pernicious Agitation — Moral 
AND Material Viewpoints — Cost of the Islands to the 
United States — Confusion of Issues — An Economic 
Paradox — Inadequacy of Proposed Measures — Present 
State of the Islands — Cost of Maintenance — Ques- 
tion OF Their Security — The Extra Expense — A Philip- 
pine Native Army — Excellence of Material — Islands 
are Self-supporting — Their Fiscal Situation — Fallacy 
of Some Economic Objections — Proposed Sale of the 
Islands — Possible Economic Effects — Moral Consid- 
erations Involved — No Basis for "Get Rid of Them" 
Argument — The " Problem " Exaggerated. 

Of conditions which have retarded progress in the 
Philippines, agitation which tends to create uncertainty 
about their political stabihty and status, such as sugges- 
tions to sell or trade the islands, are among the more 
detrimental. While such suggestions hardly will be taken 
seriously in diplomatic circles, they nevertheless are per- 
sistently thrust upon public attention by persons in Amer- 
ica and elsewhere, who either are grossly mistaken about 
conditions and circumstances which apply to the proposi- 
tion, or who take this means to gain political advantage 
or personal notoriety. It is highly important to the future 
of the islands, and to wider interests of the United States, 
that such impractical ideas be set at rest; which may, 
perhaps, be done by plainly presenting some pertinent 
issues involved. , 

476 



VALUE OF THE PHILIPPINES 477 

Broadly, arguments which apply to this question have 
two viewpoints — moral and material. In prevailing 
discussion of the position of the United States in the 
Philippines both of these lines of attack have been used 
to attempt to show that it should relinquish sovereignty 
there; but material arguments apparently have produced 
greater effect. In any event, they have been more per- 
sistently urged, and with greater plausibihty; so it may 
be well to give them precedence here. 

It is probable that none of material arguments against 
retention of the islands by the United States has had 
greater weight with the American people than statements 
carefully compiled to show that they already have cost the 
Government an enormous sum. The Philippines have 
cost the United States a great deal of money; although 
many financial balances prepared by opponents of the Gov- 
ernment's policy can be discredited by candid auditing. 
But admitting that a large sum has been spent because 
our nation acquired these islands from Spain, it neverthe- 
less is true that to drag this question of cost into discus- 
sion of our future relations to the islands involves a fal- 
lacy. This money, or the greater part of it, was spent 
in suppressing an insurrection and in re-establishing civil 
order; or in the exercise of extraordinary police power. 
If a serious riot occurs anywhere, resulting in destruction 
of property, and requiring troops to suppress It, the extra 
cost is reckoned as a legitimate charge upon the main- 
tenance of government. Such incidents are deplored and 
regretted, but no reasonable citizen objects to paying the 
bill, although he well knows the loss never can be recov- 
ered, nor replaced except by fresh increment of wealth. 
The American civil war cost taxpayers of the nation an 
enormous sum; but sensible men realize that the loss can 
never be recovered, although it may be restored, and 



478 THE FAR EASTERN QUESTION 

has been many times over. Such extraordinary govern- 
mental expenses are analogous to losses by fire. 

So in proposing to sell or give away the Philippines, 
it is clear that by doing so our nation will not thereby 
recover what these islands already have cost it, unless 
it should get an equivalent sum in exchange for them, 
or adequate compensation in another form. The injec- 
tion of this matter of past cost Into the discussion involves 
some economic paradoxes, which indicate a confusion of 
ideas among those who advocate this disposal of the 
islands. Many who want to sell them on the ground of 
what the islands have and will cost the United States, 
profess to believe that we will be able to make a profitable 
sale of this expensive dependency, and thereby recoup. 
This Idea seems to be based on a vague notion that another 
nation can make the Islands profitable, and will be glad 
to take them off our hands. Here Is a paradox; for If 
the islands are destined to be a burden to the nation 
which governs them, It is evident that the United States 
will find It difiicult to sell or give them away; while if 
they can be made a source of profit, why should it, after 
having borne the brunt of a political and economic cata- 
clysm, not reap this profit for itself? 

Recognizing that to get rid of the Islands now will not 
necessarily reimburse the nation for what they already have 
cost, a reasonable estimation of material elements involved 
must depend upon present and future contingencies. Cost 
of maintaining American sovereignty in the Philippines has 
two aspects: expense attached to administration of civil 
government in the Islands, and expenses necessary to pro- 
vide for their security. As the islands cannot now, and 
probably never can defend themselves against the aggres- 
sion of a powerful nation, their defense will In some meas- 
ure devolve upon the United States, and this means ex- 



VALUE OF THE PHILIPPINES 479 

pense. Many take for granted that it means additional 
expense to the United States. For security the islands 
ultimately must depend upon the United States army and 
navy, particularly the navy. The United States will main- 
tain an army and navy in any case; so presumption that 
retention of the Philippines will entail extra expense im- 
plies that their possession will require a larger military 
and naval force than otherwise would be needed to safe- 
guard our national interests throughout the world. 

This is a debatable question, and involves vast consider- 
ations. Projected on this hypothesis, the discussion at 
once assumes proportions so great that the Item of the 
Philippines becomes Insignificant by comparison. I have 
given considerable thought to this subject, and proposi- 
tions which it Includes, and I believe, leaving the Philip- 
pines entirely out of consideration as part of our national 
domain, that we will be unable to reduce our army 
from its present status, and will find it necessary to increase 
our navy In order to afford adequate protection to our 
national Interests in the Far East. If our broader In- 
terests demand such a naval programme In any event, its 
application to the security of the Philippines becomes 
largely incidental. I think it can be demonstrated that 
the permanent existence of a friendly and intimate relation 
between the Philippines and the United States, which Is 
the object of and the likely result of our present policy, 
will strengthen America's military and naval position In 
the Pacific, and eventually will reduce expense attached 
to its maintenance; and In this I ignore material compen- 
sations from other sources, confining the statement purely 
to the single element. 

At present 12,000 to 15,000 United States troops are 
kept In the Islands, and there Is little probability that It 
will be practicable to reduce this number for several years. 



48o THE FAR EASTERk QUESTION 

The extra expense attached to maintenance of these troops 
in the Philippines is difference between the cost of their 
keep there and the cost of keeping them at home. At 
present it does cost more to have these troops in the is- 
lands than if they served only in the United States. 
They, of course, get the same pay and allowances in both 
places, and there is little difference in their upkeep in 
time of peace. The chief additional expense is the factor 
of transportation to and from the United States. The 
present tour of duty in the Philippines is two years, which 
means that troops frequently are moved great distances at 
considerable actual expense for transportation, and loss of 
time from active service while in transport. While it 
never will be practicable entirely to eliminate this additional 
expense, there is no doubt that it can be materially reduced. 
Many army officers favor an increase of the insular 
duty tour to three or five years. The two year tour was 
fixed during the disturbed period which attended the in- 
surrection and early days of civil government, when troops 
were subjected to arduous service, and before our officers 
had learned how to manage men in the tropics. Service 
in the Philippines Is not now more strenuous than In the 
United States, and largely consists of routine duty in 
well situated and sanitary barracks. There Is no sound 
reason why troops should not retain their health during 
an extended period of service In the Islands. As we be- 
come more familiar with conditions which surround life 
in the tropics, It will be possible to Introduce eco- 
nomies In the military budget. That it always will cost 
to maintain a military and naval outpost In the Far East 
may be granted, for It costs to keep such establishments 
anywhere. Americans should, however, learn mentally to 
separate the question of the security of our position In the 
Pacific from the local Issue of adminIstra,tIon of the Philip- 



VALUE OF THE PHILIPPINES 481 

pine Islands. The United States, it is safe to predict, will 
in the future maintain a naval and military post in Asiatic 
waters whether the Philippines are retained or not. 

As time passes, with continuation of tranquillity in the 
Islands, such United States troops as are stationed there 
probably will be concentrated In two or three large posts, 
the main one being near where the major naval base Is 
estabhshed. Artillery and infantry will be the arms 
chiefly required, since the troops will not be expected to 
take the field in force. For poHcIng the Islands native 
troops may almost exclusively be employed. There al- 
ready are several thousands of native troops, denom- 
inated Scouts and Constabulary. The Scouts are recruited 
as part of the United States army, and chiefly are officered 
by Americans. The Constabulary Is attached to the 
Insular Government, and is paid by It; and also Is 
chiefly ofiicered by Americans, some of whom are detailed 
from the regular army. These troops have demonstrated 
that they are capable of developing first-class efficiency, 
and experts think that native troops can, when properly 
officered and equipped, be depended upon to hold their 
own against any Asiatic soldiery. The raw material Is 
excellent. 

Plans to recruit and maintain a native army suflUcIent 
to police the Islands, and upon occasion provide reinforce- 
ment to the United States for defense of the Philippines, 
or other operations in the East, are seriously being con- 
sidered by the Government. While the Scouts and Con- 
stabulary now are separate organizations, time probably 
will witness their consolidation, as they perform prac- 
tically the same duties. When they were organized 
It was not thought wise to burden the budding Insular 
Government with the whole expense. In establishing the 
native troops upon a stable basis, It will be possible to 



482 THE FAR EASTERN QUESTION 

profit by experience gained, and to guard against errors. 
It will be an excellent plan to officer this force entirely 
by graduates of West Point, a proportion of whom well 
may be Filipinos. This will entail increase of classes at 
the Military Academy, but this must soon be done anyway, 
as our army is under-officered. The advantages of such 
a plan are clear. A native army will neither expect nor 
desire to get away from the country, it can be main- 
tained much more cheaply than a similar body of Amer- 
ican troops, and on the whole will be more adaptable 
to requirements of the situation. We may now see 
our way clearly enough in this matter to proceed, and 
steps to establish such a permanent force should receive 
early attention. Twenty thousand men should suffice for 
any contingency which reasonably may be anticipated. 

From some comment on the topic which one hears 
and sees in print, it is evident that many persons think 
that all or part of the cost of civil government in the 
Philippines is borne by the United States Government. 
This impression is erroneous, and its existence only can 
be explained by attributing it to persistent misrepresenta- 
tion. Since civil government was established, in 1901, 
expenses attached to its administration, with some un- 
important exceptions, have been met out of the insular 
revenues. Notwithstanding unfair treatment in legisla- 
tion by the home Government, a succession of devastat- 
ing natural visitations, and detrimental results of years of 
war and unsettled conditions, the Islands are self-sup- 
porting. Revenues from all sources for the fiscal year 
1906-7 were $13,754,046.00; while expenditures, includ- 
ing allowance for various sinking funds, were $12,691,- 
378.00; leaving a reserve of over a million dollars. This 
has been accomplished In the face of unusual conditions, 
which required suspension of nearly alj taxes upon land, 




u 



VALUE OF THE PHILIPPINES 483 

suspension of other taxes In some provinces, and frequent 
appropriations for relief of the people. During this pe- 
riod the Government has successfully undertaken a grad- 
ual shift of methods of taxation, which in the Spanish re- 
gime bore heavily upon the poorer classes. 

In this connection, some comparisons are interesting. 
The Philippine Islands are 3,141 in number, have a total 
area of 127,853 square miles, and a population of 7,635,- 
-426. The revenue now exacted amounts to $1.52 per 
capita. Cuba has an area of 44,000 square miles, and 
a population of 1,572,845; and her per capita taxation 
Is $13.33. Porto Rico, with an area less than that of 
the Island of Panay, exacts taxation of about $3.70 per 
capita. Japanese pay a per capita annual tax of $8.00. 
These figures indicate that with Increasing prosperity it will 
be comparatively easy to Increase insular revenues with- 
out their being burdensome to the people. If the islands 
are treated fairly by Congress, and given opportunity to 
develop their resources, there need be no fear that they 
will be a burden upon the national treasury. On the 
contrary, they can extend their school system, undertake 
internal Improvements and meet all legitimate demands 
upon the Insular treasury; and they will be able to main- 
tain at their own expense such military force as I have 
suggested, and this will be their contribution to the scheme 
of broad national security. 

Material profit which will accrue to the United States 
through industrial and commercial development of the 
islands Is among compensatory benefits to be estimated 
in this connection, and which I already have reviewed. 
Another phase of this matter may, however, be mentioned. 
Much opposition In America to retention of these Islands 
may be traced to allied corporations, which allege that 
certain American Industrial and agricultural Interests will 



4B4 THE FAR EASTERN QUESTION 

be adversely affected if Philippine products are given free 
entry into the United States. It is significant that the in- 
terests which present this argument are sympathetic to pro- 
posals to sell or exchange the islands. The matter of a 
sale of the Philippines presents some interesting economic 
suggestions. Only one probable purchaser has so far been 
suggested — Japan. What would be the effect upon 
American industry if the Philippines should fall into the 
hands of Japan? 

Staple exports from the Philippines are hemp, sugar 
and tobacco, in the order named. Hemp is a Philippine 
monopoly, and at present there is an export duty on it. 
More than half of the hemp produced in the world is 
consumed in the United States, and if industrial ex- 
periments now under way prove successful, the United 
States may consume all the hemp these islands can pro- 
duce. Under the existing tariff arrangement between the 
United States and the Philippines, export duty on 
hemp which goes to the United States is refunded, and 
accrues to the benefit of the purchaser; thus giving Amer- 
ican manufacturers who use hemp this advantage over 
competitors in other countries. At present the islands 
lose revenue of nearly half a million by this law. If 
the islands should be sold to Japan, or are otherwise 
acquired by her, she could at once make the hemp industry 
a government monopoly, and increase the export duty to 
as high a point as would be possible without curtailing 
consumption. This could produce increased revenue which 
would be ample to take care of interest and sinking fund 
of a bond issue to purchase the islands, and eventually 
might lead to the extinguishment of certain industries in 
the United States, and usurpation of their markets by 
hemp products manufactured in Japan. 



VALUE OF THE PHILIPPINES 4B5 

Everyone recognizes that It benefits American Industry 
to be able to secure hemp without a duty being added to its 
price, and there is no opposition to Its free entry into 
the United States ; In fact, it enters free now. Opposition 
In America to free trade with the Phihppines seems to 
center In the beet sugar Industry. An attempt Is made 
to have it appear that this opposition Is In the Interest 
of beet sugar growers, but sugar refiners are the real 
movers in the matter. It Is admitted that the Philippines 
do not produce enough sugar materially to affect the 
market In America even if It should all go there (very 
little does now) ; and it Is contended that if offered a 
free market In the United States there would be great 
development of the sugar industry in these islands, which 
might in time adversely affect American beet sugar grow- 
ers. What might happen, In respect to sugar, If Japan 
should take the Philippines? Is it not reasonable to sup- 
pose that Japanese labor would be imported to till the 
plantations, and that the sugar refineries of Japan, which 
already enjoy the protection of government monopoly, 
would get a further advantage over the American sugar 
industry in competing in the world's market? If this 
should prove true, the sale of the Philippines to Japan 
might bring about the result which sugar manufacturers 
of America pretend to fear. 

In giving precedence to material aspects of this situa- 
tion, I have not felt that Its moral aspects are unimportant 
or of secondary Interest. The moral propositions in- 
volved stand out so clearly that it is hardly possible for 
casuistry to obscure them. Think of proposing, after 
having In an altruistic Impulse undertaken to govern a 
country, to sell it, and of course Its inhabitants also, be- 
cause we do not see our way clear to make money out of It 



486 THE FAR EASTERN QUESTION 

and them, and to be rid of some trouble and responsibility ; 
to be rid of what is called a " problem," when human 
affairs present a perpetual problem ! 

In a time now not far distant the American people will 
understand that the so-called Philippine problem is a 
Bogey. In the future we will be ashamed of fears 
which attended our early efforts to administer these islands; 
for as years pass, and we grow more familiar by contact 
with this " problem," and as its difficulties recede into 
correct perspective in comparison with our combined na- 
tional activities, we will know it for what it really is; an 
undertaking not above the capacity of a third-rate Euro- 
pean nation. 

There Is one moral factor attached to a sale of the 
islands which many persons apparently have overlooked; 
the ethical difficulty involved in turning over a Christian 
people to be governed by a pagan power; which probably 
will be the fate of these islands should the United States 
ever, for any reason, entirely cast them loose. When re- 
cently a segment of the American press was seriously dis- 
cussing a sale of these islands to Japan, an American 
clergyman In Manila thundered from his pulpit: 

" We will not be sold into Paganism." 

There appears, so far as I am able to estimate condi- 
tions in the Philippines and circumstances which now 
determine and must in the future decide what their rela- 
tions to the United States will be, no sound basis for a 
" get rid of them at any cost " agitation. Such dis- 
cussion Is based upon misconception of the facts, and its 
chief practical effects are to hamper material progress 
In the Islands, Increase the difficulties of administration, 
and defer the time when Filipinos will be prosperous and 
contented. Taking into consideration their geographical 
location, and the indisputable tendency for greater nations 



VALUE OF THE PHILIPPINES 487 

to absorb lesser ones, I cannot believe it will ever be pos- 
sible for the Philippines permanently to exist as an in- 
dependent political entity. Left to themselves they inevi- 
tably will fall under the dominion of some superior power, 
and for the United States to abandon its position there will 
be to cast them, like a rich prize, to be struggled for by 
other nations; a fate to which, in my opinion, the Amer- 
ican people never will consign them. 



CHAPTER XXXV 

THE MORO PROVINCE 

The Other Philippines — History of the Moros — 
Early Settlements — Piratic Excursions — The Spanish 
Regime — Transfer to the United States — The Ameri- 
can Policy — Efforts at Reform — Power of the Datus 

— Troubles With the Moros — Suppression of the In- 
surrection — Establishment of Civil Government — Its 
Semi-military Character — The Administrative Process 

— Population and Resources — Fiscal Situation — The 
Schools — Moro Characteristics — Mindanao — The 
SuLU Archipelago — The Islets — Jolo — Juramentadas 

— Moros and Filipinos — A Valuable Possession. 

There are two Philippines. One is the Philippines 
of Manila, Iloilo and Cebu: which has representation be- 
fore Congress, on the Commission, on the Insular Supreme 
Court ; which elects its own governors and Assembly, and 
talks about independence. 

The other Philippines contains people of a different 
race, who practice a different religion, have different 
manners and customs; who live under a different form of 
government, and who never have thought of independence 
in the accepted political meaning of the term. This is 
that part of the archipelago officially denominated Moro 
Province. 

The Moros are supposed to be of Arabic origin, but 
their ethnology now has only incidental interest. The 
Immediate ancestors of Philippine Moros seem to have 
been the dyaks of Borneo, who many hundreds of years 
ago began to make forays and excursions to the chain 

488 



THE MORO PROVINCE 489 

of small islands now known as the Sulu group. Thence 
they extended to Mindanao, where a salubrious climate 
and fertile soil induced them to form settlements. When 
two princes of Borneo quarrelled, one of them removed 
to Jolo, where he established his Court. Moros occu- 
pied those islands without trouble, except numerous civil 
wars, until long after Spanish sovereignty was established 
in the Philippines. As civilization progressed and wealth 
accumulated in the Visayas and northern islands, the spoil 
which they offered tempted Moros to make depreda- 
tions upon them. At intervals fleets of Moro vintas in- 
vaded the north, ravaged and plundered the Visayas, and 
once even threatened Manila. At every coast settlement 
in the Visayas the remains of watch towers and stone 
forts can be seen to-day, evidences of former Moro 
activity. Spain was compelled to make effort to protect her 
colonies, and after several campaigns succeeded, with 
great difficulty, and partly by diplomacy, in bringing the 
Moro country under her nominal rule. While Moros, 
through acquiescence of their leaders, thus were induced 
to recognize Spanish sovereignty, it was a yoke which 
they felt very slightly and which Spain dared not press 
too strongly upon them. The Spanish were content if 
the Moros would remain quiet, and hardly made an at- 
tempt to govern them locally. This complaisant policy 
was destined afterward to react upon Americans. 

While the Spaniards established garrisons in some coast 
towns, and thus managed pretty well to control the trade 
of the southern islands, inhabitants of the interior scarcely 
were conscious of Spanish rule, and pursued their ancestral 
ways practically unmolested. There was, in recent times, a 
recognized Moro sovereign, the Sultan of Sulu, whose 
seat of government was and still is at Jolo. The Sultan 
for many years drew an annuity from Spain, but he had 



490 THE FAR EASTERN QUESTION 

little real authority outside the Island on which he lived. 
The people were ruled by datus, or local chiefs. The 
position of a datu depended upon personality, and his 
ability to secure and hold a following. More powerful 
datus would receive the allegiance of lesser ones, and 
datus ranked according to the number of fighting men 
who obeyed them. They fought among themselves. 
When petty civil wars between neighboring datus oc- 
curred, as they frequently did, the Spanish Government 
and the Sultan usually left them to fight it out provided 
they did not injure Spanish property or subjects, or unless 
the strife threatened to embroil the entire country. On 
such occasions the Spaniards usually would end the war 
by taking the side which for various reasons seemed to 
be more politic, and aiding its leader to crush his enemy. 
Thus the Spanish regime, far from trying to develop po- 
litical homogeneity among Moros, rather strove to keep 
the greater datus asunder, and to employ their mutual jeal- 
ousies and animosities to preserve the balance of Spanish 
authority. In early days of the Spanish regime, the friars 
made some attempts to proselyte among the Moros, who 
are Mahometans ; but these efforts were followed by such 
disagreeable consequences that they were abandoned. 

This passing glance at Moro history may serve to give 
an idea of the situation in the southern islands when the 
United States took control of the Philippines. Hardly 
had the Spanish-American war begun when Moros 
started an insurrection which the Spaniards, being en- 
gaged elsewhere, could but feebly oppose. In a short 
time the ^Spanish governor and garrison were besieged 
in Zamboanga, and so they remained until rescued from 
their dilemma by American troops. It thus happened 
that in the Moro country, as elsewhere in the islands, the 
United States took over an insurrection. This one, how- 



THE MORO PROVINCE 491 

ever, had no disturbing political idea behind it, having 
as its genesis a religious and racial antipathy coupled with 
irritation caused by petty commercial oppressions; and, 
consequently, was not so hard to deal with. Amer- 
ican military officials succeeded in convincing leading datus 
of their friendly intent, and in a short time peace was 
restored. The Spaniards sailed away, and Americans 
ruled in their stead. 

Regarded one way, troubles of Americans with the 
Moros since then are due to ourselves and our ways. 
Having here a fine new possession, it was natural that the 
United States Government should look it over and begin 
to take stock. This stocktaking revealed some peculiar 
conditions, and the attempts to alter some of these con- 
ditions subsequently caused collisions. 

Placed in an unfamiliar environment, and occupied by 
the Filipino insurrection in the north, the American author- 
ities in Moroland at first devoted themselves merely to 
establishing their authority in the principal towns, where 
garrisons were stationed; and in opening friendly relations 
with the Sultan and more influential datus. No especial 
obstacle was encountered in these preliminary moves. The 
Sultan was cajoled into recognition of United States sov- 
ereignty by continuation of the pension which he formerly 
had drawn from Spain. In Mindanao the greater datus, 
such as Piang and Ali, likewise were conciliated, and out- 
wardly accepted American authority. 

As time passed, and Americans gradually came to 
learn something of the country and conditions in the 
interior, a state of affairs was revealed which rightly was 
judged to be inconsistent with the policy of the United 
States Government. The mass of the people practically 
were under the domination of datus, who exercised al- 
most absolute power in localities which they governed, 



492 THE FAR EASTERN QUESTION 

and who frequently used this power to defraud and op- 
press their subjects. The laws were crude, and their 
administration barbaric. There was no definite land 
tenure, nearly all domain being held by datus and their 
favorites. Slavery and polygamy existed. Except for 
a few Jesuit schools in garrisoned towns, which taught 
children of Filipino and Chinese residents, the people 
were being left in ignorance. The Spaniards had madcg 
no effort to educate the people, after early attempts oi 
the church provoked such bitter opposition, for with Spaii 
school and church were synonymous, and instruction nevei 
moved except under the wing of religion. 

To improve this condition was a problem which con- 
fronted the Americans and, true to inherited training, they 
set about it with confidence. In 1902 civil government, 
after a fashion, was extended to Moro Province, and with 
its establishment attempts at reformation began. The 
rapid change from a condition of comparative peace to 
one of insurrection which followed is attributed by many 
to replacement of military by civil government. This view 
has some plausibility, but argument in favor of indefinite 
continuation of military rule which is based upon it is, 
when scrutinized, revealed to be founded upon miscon- 
ception. The military government succeeded in maintain- 
ing order, it is true, and might have continued to do so 
for years by a show of military force and by not interfer- 
ing with local affairs of the people. But this would have 
meant comparative stagnation, and continuation of con- 
ditions which detained the people in barbarity and pre- 
vented development and prosperity of the country. 

Reformation meant interference with the authority of 
datus and curtailment of their power; the abolition 
of slavery and suppression of slave trade; estabhshment 
of courts, and compelling popular rec9gnition of authority 



THE MORO PROVINCE 493 

of the law; providing a sound foundation for commercial 
and industrial development by creating a legal basis for 
land titles; establishment of a school system; and, in 
general, extension of the functions of the central govern- 
ment into all parts of the country. 

None of these things had ever been accomplished, 
hardly attempted by Spain ; so here was a field for pioneer 
work. To have accomplished such an evolution with- 
out serious friction would be difficult under the most 
favorable conditions. In the Moros the Americans 
tackled a fierce, warlike, ignorant and intractable people, 
who rarely had been defeated and never conquered; a 
combination of qualities almost destitute of pliancy, and 
which made resistance a practical certainty. As was an- 
ticipated by many, the attempt to apply American policy 
to the Moros aroused opposition among them. Petty 
datiis In remote districts refused to accede to admin- 
istrative processes of the Government, and when a show 
of force was made to compel them, offered armed resist- 
ance. Thus began disorders, which in a short time 
involved the entire Moro Province, and which were sup- 
pressed only after arduous campaigning and some severe 
fighting. Fortunately, Internecine jealousies of datiis 
prevented them from combining against the Americans, 
and this made it possible to defeat them in detail. The 
campaign in the Lake Lanao country Is typical of this 
weakness In Moro method. The cottas of perhaps fifty 
petty datiis adjoin the lake, and these fell one by one under 
attacks of American troops. Fighting men of one cotta 
would witness the reduction of a neighboring cotta with 
Indifference, often with satisfaction, apparently unable to 
realize that their turn would come next. American 
authorities soon adopted the Spanish expedient of playing 
hostile datus against each other, and with considerable 



494 THE FAR EASTERN QUESTION 

success; for in this way they were prevented from com- 
bining their forces. 

While the Lanao and Cotobato districts presented 
greater difficulties, the fighting in Jolo probably had more 
decisive effect. Here occurred the Bud Dajo fight, the 
so-called battle of the crater, sanguinary details of which 
caused so much criticism in the United States. So severe 
was the defeat inflicted upon hostile Moros in this fight 
that further resistance was abandoned, and peace was re- 
stored. During the entire period of insurrection Gen- 
eral Leonard Wood was governor of Moro Province and 
commander of troops engaged in the operations, and to 
his able administration much of their success is due. The 
United States army did splendid work in this little war. 
Moro constabulary took an effective part in the campaign, 
and fought their own people with as much energy as they 
used to display in attacking Filipinos. 

Upon suppression of the insurrection civil Govern- 
ment, which perforce had restrained development of its 
policy during hostilities, resumed its efforts, and in time 
the now existing administrative system of the province 
was organized and put into execution. There is a gov- 
ernor, who also is commander of the military department 
of Mindanao; a treasurer, an attorney general and an 
auditor. These four officials constitute the Provincial 
Legislative Council, which legislates for the province, 
and whose acts may be vetoed by the Philippine Commis- 
sion. The province Is divided into five districts, each 
with a governor, secretary and treasurer, who compose 
the District Board and are appointed by the Provincial 
Legislative Council, subject to approval of the Commis- 
sion. Districts are divided into tribal wards, each ad- 
ministered by a head man and a deputy. Local datus 
usually are appointed head men in t;helr wards, as ex- 



THE MORO PROVINCE 495 

perience has shown that the people are easier to control 
when their familiar chiefs thus are employed. District 
boards make laws for a district, subject to amendment or 
annulment by the Provincial Council. District governors 
act as justices of the tribal courts. Appeals from tribal 
courts go to the Court of First Instance for the province, 
which is presided over by an American judge, and consti- 
tutes the Fourteenth Judicial District of the Philippines. 
Spanish civil and penal codes chiefly are used, as elsewhere 
in the islands, but Moro laws, which have been crudely 
codified, sometimes are used in modified form. Christian 
elements of the community are under the same status as in 
other provinces. Under the law organizing the province, 
army officers may act as district governors and oflicials, 
and if they exercise these offices they receive a small addi- 
tion to their pay. At present several district governors 
are army officers, from motives of convenience and econ- 
omy, as it is necessary to maintain a number of military 
posts in the province. 

It will be perceived that this Government, while called 
a civil government, is semi-military in character, in the 
sense that its authority still largely rests upon the presence 
of troops, and that it is chiefly administered by army 
officers. But the essence of civil government is here. 
The law of the land, not autocratic dictum, is the basis 
for administration, and the people are being instructed 
in obedience to this law as interpreted by the central 
Government and the courts. Still, the work has only just 
begun. The central Government has comparatively little 
knowledge of what is going on in many tribal wards, its 
source of information being the local datus. Gradually 
the people are learning that they can appeal to higher 
authority than their datus against injustice and oppression, 
and the worse evils of datu caciqueism are being remedied. 



gar-n>"«^ .^-^f^w^v^-.. 



496 THE FAR EASTERN QUESTION 

Slavery no longer exists, polygamy is diminishing, and a 
legal basis for personal and real property rights is being 
established. A plan has been adopted whereby it is hoped 
in a few years to have all land titles registered. Formerly 
datus claimed all unoccupied land, which is the greater 
part of provincial domain in the larger islands. The 
Government has refused to recognize these claims, how- 
ever, and will grant titles only upon proof of actual occu- 
pation and cultivation. This will remove a cloud from 
the title of public lands, and throw open the country 
to settlement and development. The Government is en- 
deavoring to discourage present migratory habits of the 
Moros, and to get them to settle upon land and establish 
titles ; but without much success so far. 

The present population of Moro Province consists ap- 
proximately, for an exact census never has been made, 
of 450,000 Moros known as civilized, 60,000 Filipinos 
and Chinese, and about 50,000 uncivilized people who 
live in the mountains of eastern Mindanao, known as 
hill tribes. Of this population a great majority inhabit 
the large island of Mindanao, which has nearly half a 
million inhabitants, of whom nearly three-fourths are 
Moros. Filipinos chiefly live in northwestern Mindanao, 
where there is a small organized province attached 
to the regular Insular Government, and in the coast towns. 
Chinese are merchants and traders of the province, and 
have been established there for many years. The prov- 
ince is self-supporting. The fiscal year 1907-8 showed 
a revenue of 750,000 pesos, and a surplus of 30,000 
pesos. All customs and other revenues collected in the 
province inure to the provincial treasury. A provincial 
school system is maintained out of the revenues. Schools 
have been established throughout the province, but except 



THE MORO PROVINCE 497 

in larger towns considerable difficulty is had in inducing 
Moro children to attend. The attendance is, however, 
slowly increasing, and the people are growing more 
friendly to the schools as they come to understand their 
purpose. Moro children are keen and apt to learn. I 
was rather struck with a scene in the industrial branch 
of the Zamboanga school, where some three score of 
Moro, Fihpino and Chinese boys were learning how to 
make wicker baskets, chairs and other articles, under the 
instruction of a Chinese teacher. It was somewhat diffi- 
cult to realize that this was an American public school. 
It was the American policy in Moroland revealed at a 
glance. The schools of the province now contain 60,000 
children, of whom a majority are Filipinos. 

Moro Province presents an administrative rather than 
a political problem, except as political considerations are 
externally thrust upon it. Moros have no idea of politics 
in the modern sense, and take no interest in such matters. 
They moreover as yet have practically no conception of 
responsibility and loyalty to a central government. Their 
civilization, such as it is, is based upon family and 
tribal relations, held together by a thin thread of religious 
imperialism, centering upon the Sultan. The people for- 
merly paid tribute to the datus, who in turn paid tribute 
to the Sultan, unless they felt able to resist his power, 
when they refused, and civil war usually resulted. The 
only political problem, to employ a seeming paradox, in- 
volved in the administration of Moro Province is a re- 
ligious one. Mahometanism, ever poor soil for pros- 
elyting of other religions, has here lost none of its stub- 
bornness and fanaticism. Any interference with the re- 
ligion of Moros is certain to cause serious trouble. So 
the Government does not desire the presence there of other 



498 THE FAR EASTERN QUESTION 

religious sects. The Jesuits already are established, but 
they long ago learned to leave Moros alone, and confine 
their attention to Filipinos. 

In time the Insular Government hopes to accomplish 
much for the Moros and their country. There are two 
customs, however, which even the military prefer not to 
interfere with, at least not now; concubinage and carrying 
of arms by the fighting men. With great difficulty the 
authorities have secured most of the rifles formerly pos- 
sessed by the warriors, but Moros still strut about with 
dangerous looking barongs thrust in their belts. They 
are splendid fighters, and if the Government ever needs 
an Oriental army it can raise it here. Moros differ In 
some respects from any Orientals I have seen at close 
range; their eyes meet yours without flinching, with the 
look of men who may at times have been defeated by su- 
perior force or skill, but who never have been subjugated, 
and who are ready to take up arms again at any moment. 
The Moro constabulary does excellent work, and is de- 
pendable, so the officers believe. Some American army 
officers who have had contact with Moros think that, with 
equal equipment and training, they make better soldiers 
than Japanese. 

A cruise through the southern islands tempts one to 
rhapsody. The smaller islands are more picturesque, 
rising out of a sea of brilliant blue or purple, and usually 
with a bank of fleecy clouds clustering about the summits 
of the hills. Mindanao is the largest island in the Philip- 
pines, and probably the richest in natural resources. It 
is spoken of out there as a " white man's country " ; mean- 
ing that the climate is salubrious for people who have been 
accustomed to reside in temperate zones; but I suppose 
that by now the slander about the Philippines being an 
unhealthy country is sufficiently refuted. The manner of 



THE MORO PROVINCE 499 

life of most Americans there has been unhealthy, I 
grant. Mindanao impressed me as being best of the is- 
lands when climate is in mind. Zamboanga is, I think, 
the prettiest town in the islands. It is the provincial 
capital and principal port in the Moro group, and is sur- 
rounded by a beautiful country through which one may 
drive upon well kept roads. The streets are clean, the 
buildings neatly whitewashed, and the place has an air 
of prosperity and progress. It is the only place in the 
Philippines where jinrikishas are used. 

Mindanao indeed is a wonderful island, as yet prac- 
tically undeveloped. Great rivers flow through broad 
and fertile valleys, while the hills and mountain slopes, 
which in places rise to an altitude of 10,000 feet, are 
covered with a dense growth of timber, mostly valuable 
hardwoods. Hemp grows on the island in great pro- 
fusion and excellence. There now is a thriving colony of 
American hemp planters at Davao, and the industry is 
rapidly extending. The resources of Mindanao have not 
yet been scratched. Populated as densely as Porto Rico, 
the island will support 20,000,000 people. Hemp, rub- 
ber and rice are the chief staple products, but nearly all 
kinds of tropical and sub-tropical crops thrive in this soil 
and climate. 

Jolo perhaps is the most interesting of the chain of 
islands which form the Sulu Archipelago, because of its 
historical associations and on account of being the seat 
of the Sultan. In Jolo one suddenly steps into a warlike 
atmosphere. The order is that no soldier or foreigner 
shall ever be without arms, and so one sees men going 
about with pistols strapped on them. I met some soldiers 
returning from a plunge in the surf. They wore only 
bathing suits, and each man carried his revolver in his 
hand. While they were in the water they deposited their 



500 THE FAR EASTERN QUESTION 

weapons on shore, guarded by two comrades. At a fixed 
hour every evening all Moros must leave the walled city 
of Jolo, when the gates are locked and guarded during the 
night. In the morning they are again opened, and sen- 
tries always are on duty, who scrutinize Moros who pass 
through. 

The reason for these extraordinary precautions in time 
of peace is the jiiramentada, a type of religious fanatic 
who occasionally takes into his crazy head to get out 
his barong and run amuck. He exists In all parts of 
the Moro country, but Jolo seems to be his favorite hab- 
itat. The desperate deeds of juramentadas could fill 
a volume. Once they go on the war path, which they 
always do without the slightest warning, they will cut and 
slash at every Christian within reach until they are them- 
selves killed. So wrought by frenzy do they become that 
sometimes It takes a score of bullets to bring one down. 
Quite recently a juramentada who ran amuck at Asturius, 
a suburb of Jolo, was shot twelve times before he fell. 

The Spanish Government also had juramentadas on Its 
hands, and they reaped many sacrifices. There is a story, 
probably apocryphal, of how a Spanish governor of Jolo 
managed a juramentada Incident. It has been printed be- 
fore, but always is Interesting, and It points a moral. 

A peculiarly atrocious juramentada outrage was perpe- 
trated in the city, the victims being a Spanish family. 
The juramentada was killed, as Is usual, for one always 
resigns himself to death and makes no attempt to escape. 
This juramentada was a follower of a neighboring datu, 
and the governor sent a protest to the datu, demanding 
that such men be kept under control. The datu replied 
that he was very sorry, but the man was juramentada 
and he could not control men so affected. A few days 
later a Spanish gunboat appeared before the cotta of this 




> 



fe 



THE MORO PROVINCE 501 

datu and shelled it, killing a number of people and de- 
stroying much property. The datu sent a hasty protest 
to the governor, who Is said to have replied: 

" I am very sorry; but my gunboat has gone jtiramen- 
tada, and I cannot control it." 

Whatever method Spanish governors may have used, 
juramentadas were few in later days of the Spanish re- 
gime, and they revived soon after American occupation. 
Fortunately, they now seem to be diminishing; but they 
still are frequent enough to be a cause of apprehension to 
foreigners in Jolo. 

While they are but the fringe of the Philippines, 
Its ragged edges so to speak, the islands of the Sulu group 
are well worth a visit. Here ply the pearl fishers, and 
snuggled In the maze of tiny Islets are rendezvous of 
native and Chinese smugglers who* use Borneo as a base. 
In order to check smuggling the Philippine Government 
maintains custom houses at several points. SiassI, Bangao 
and SitankI are remote even from the Philippine world; 
yet we would hardly drop anchor In one of these little 
ports when the cutter would be surrounded with v'lntas 
filled with Moro boys, who would chatter at us in Eng- 
lish, and invite us to throw coins for them to dive after. 
Sometimes lads would stand in the vintas and perform 
the manual of arms with paddles, at the command of one 
of their number. "Carry arms; port arms; shoulder 
arms; order arms;" and the orders would be executed 
with accuracy and precision. They learn these tricks 
from the American soldiers. At SlassI a Moro boy who 
spoke very good English told us of a rich datu who always 
presents American visitors with a handsome pearl, but we 
did not test his hospitality. On Cagayan Sulu, the scene 
of Quiller-Couch's mythical romance, are two white men 
living among 3,000 armed Moros. One of these, a 



502 THE FAR EASTERN QUESTION 

United States customs officer, had, in 1908, been there 
for nearly two years, and never had any trouble 
with the natives. He was quite contented, and when 
asked if he was not afraid to live there without any troops 
or constabulary, he said: 

" If the Government ever sends any soldiers or police 
here I will resign at once; for that would mean certain 
trouble." 

Notwithstanding difficulties which are encountered, 
the American policy is making progress even in Moro- 
land. Anomalous as is the relation of the civil to the 
military element in the Government, they are here work- 
ing together harmoniously. There is only one cloud, 
and that a small one, on the horizon of Moro Province. 
This is desire of the Philippine Assembly to get con- 
trol over its affairs, which tentatively cropped out during 
the first session of this body. Owing to the bitter racial 
and religious antipathy between Moros and Filipinos, 
it is not prudent to employ Filipinos in administration of 
the province, nor will It be for years. The Moro de- 
spises the Filipino, and the Filipino hates and fears the 
Moro. Fihpino poHtlcians seem to fear that Moroland 
will become separated from the other islands, and they 
want to retain control over it. Some Americans believe 
that if the islands. Including Moro Province, were now 
given independence, the Moros would conquer the north- 
ern Islands In a few years. Fortunately, there Is slight 
probability of any fundamental alteration of the status 
of the province for a long time to come, which gives 
assurance of continuation there (with, perhaps, some pass- 
ing Interruptions) of a condition of peace and progress. 



CHAPTER XXXVI 
AMERICA'S POSITION IN THE PACIFIC 

Issues Involved — American Interests in the East — 
Question of Their Security — Command of the Sea — 
Naval Bases — Their Use and Requirements — The 
Question Practically Estimated — Prospective Oppon- 
ents — America and Japan — The Situation Elucidated 
— Its Possibilities and Probabilities — Elements of the 
Problem — The Geographical Factor — The Defense of 
Hawaii — A Possible Japanese Attack — The Factor of 
Transportation — Preliminary Moves — Mobilization 
AND Dispatch — Logical Conclusion of the Proposition. 

As appreciation of commercial possibilities of the 
Orient and their relation to industrial prosperity of the 
United States grows among Americans it will, inevitably, 
cause consideration of the security of our position in the 
Pacific Ocean, which body of water now Is recognized 
by many as the probable future center of the world's 
greater activities. 

When Interests of the United States In the East are 
mentioned, many persons In America think at once of the 
Philippines as the beginning and end of them. While the 
relation of those Islands to the question is important, they 
really are a minor factor in comparison with broader issues 
at stake. So when it Is proposed to secure our interests In 
the Far East by creating facilities for protecting them 
from possible aggression or assault, the average American, 
having only the Philippines in mind, is apt to say : " Oh, 

503 



504 THE FAR EASTERN QUESTION 

are they worth the trouble and expense? " It is possible, 
I think, justly to answer this question in the affirmative. 
But the real question is: " Will it pay to estabhsh a con- 
dition giving force and effect to America's voice in the 
solution of the problem involved in the evolution of the 
East, and making it possible to safeguard our material in- 
terests by other means than concessions which, by limiting 
our national opportunity in those regions, will re-act upon 
our prosperity at home? " 

It may be said that security of American interests in 
the Pacific depends upon command of the sea in compari- 
son with any probable antagonist; and command of the 
sea in turn depends, in addition to marine armaments, 
upon coaling stations and naval bases. Naval arma- 
ments are practically useless in any locality without facili- 
ties for supply and repair. To provide such facilities two 
things are necessary: harbors and landing places, and the 
necessary depots and mechanical adjuncts. The United 
States already is supplied with ample natural facilities in 
the Pacific. It remains, therefore, to provide only the 
artificial element. The equipments required are dry docks 
for ships of all sizes; coal and coaling machinery; shops 
provided with machinery and material needed to make 
repairs to both ships and armament; and depots contain- 
ing reserves of all needed supplies. Where natural condi- 
tions are favorable, to provide all these things requires 
only time and money. 

Since the establishment of such bases contemplates, as 
does the maintenance of armies and navies, the possibility 
of war, it is necessary to consider the probability of their 
being attacked; and in selecting sites their defensibility is 
a fundamental consideration. A naval base may be at- 
tacked both by land and sea, so this matter has two aspects. 
Should a superior hostile fleet be aljle to bring its guns 



AMERICA'S POSITION 505 

to bear upon the anchorage and mechanical facilities of a 
base its value will be destroyed, and such ships as had 
sought refuge there may be lost. The harbor should, 
therefore, be so situated that it cannot be entered or ap- 
proached by a hostile fleet except at grave peril or almost 
certain danger of destruction. Recent wars conclusively 
have demonstrated that ships cannot successfully combat 
with land batteries of anything like equal strength, while 
if the entrance to a harbor is narrow it also may be pro- 
tected by mines. Given a well located harbor, to defend 
it from naval attack is comparatively easy, and involves 
only the mounting of batteries and planting of mines. 

The problem of defense from attack by land is not, 
however, always so simple. Where circumstances make 
it possible that a base can be blockaded by sea and at 
the same time beleaguered by land, Its defenslbility de- 
pends upon ability to withstand assault and to sustain a 
prolonged siege. It is not necessary to worry about the 
land defensibility of naval bases situated in the United 
States, for they easily and quickly can be supported by 
the entire military strength of the nation. But the prob- 
lem of defending bases situated over sea from their 
sources of supply and reinforcement Is different. In 
such cases protection of a base ultimately depends upon 
supply and reinforcement, which can be accomplished only 
by securing and retaining command of the sea. Unless, 
therefore, the United States adopts a policy of perma- 
nently maintaining a naval force In Pacific waters superior 
to that which can quickly be assembled by any prospective 
opponent. It must be prepared to defend Its naval bases 
there from attack by land and sea until a fleet capable of 
disputing command of the sea with the enemy can reach the 
scene. 

The value of naval bases in Pacific waters may be said 



5o6 THE FAR EASTERN QUESTION 

to apply chiefly to war between the United States and an 
Asiatic power; for while some European nations might 
conduct large naval operations in that part of the world, 
the crux of any conflict between America and another west- 
ern power would not be there, and no naval force alone 
ever can wrest any of our major Pacific possessions 
from us. Only armies can do this, and it is not now feas- 
ible for any European power, excepting Russia, to assem- 
ble a formidable army in the Far East In the face of seri- 
ous opposition. Of Asiatic nations which conceivably may 
come into collision with the United States there are only 
two — China and Japan; so the proposition of defense 
of American interests and possessions in this locality need 
seriously consider only these two possibilities. The inter- 
nal situation and military unpreparedness of China pre- 
vents apprehension from that source for many years to 
come; so present estimation of the problem may be predi- 
cated upon the comparative situation of the United States 
and Japan. 

While there Is some disposition to deprecate discussion 
in time of peace of possibilities of war between nations as 
tending to cause such collisions, it is evident that candid 
comparison of resources and elements involved also may 
have deterrent effects. Whatever view of this question 
one may hold, there is no doubt that governments perpet- 
ually are occupied with the problems which international 
strife presents, and that they possess perennial human in- 
terest. Nor do these considerations necessarily Imply bel- 
ligerent design or Intent, and If popular discussion of them 
usually is limited to occasions when diplomatic embroil- 
ments seem to presage a disagreement. It is equally true 
that only under such circumstances Is the popular mind in 
most countries receptive of information to which national 
security and legitimate ambitions demand attention. 



AMERICA'S POSITION 50? 

That results of the war against Spain and subsequent 
events in lands bordering the Pacific Ocean would provide 
new problems for American naval and military depart- 
ments was inevitable ; and that Japan would take a promi- 
nent place in such considerations was a foregone conclu- 
sion, definitely estabhshed by her geographical location 
and rapid development. In early days of American occu- 
pation of the Philippines, and during the Insurrection, spe- 
cific evidences of adverse Japanese political activity there 
were obtained by officials of the United States Govern- 
ment, and while these quietly were relegated to archives 
In Washington without publicity, from that time our army 
and navy have regarded the Japanese as opponents against 
whom they eventually may be called upon to try their 
mettle. Since then Japan's naval and military efficiency 
has been practically demonstrated. Her national ambi- 
tions and activities have greatly widened, and new forces 
set In motion by them already have produced friction be- 
tween American and Japanese Interests in both Asia and 
America. As yet the more serious instances remain in 
comparative obscurity, known only to a directly interested 
few, and nursed in diplomatic cabinets, while those which 
so far have been widely discussed belong properly in the 
pin-prick class. But these have served to attract the atten- 
tion of the world, giving rise to much speculation on the 
possibility of war between Japan and the United States, 
until to-day many Americans seriously are asking : " What 
can Japan really do to us? " And while It probably will 
suffer periodical lapses, this question will grow more In- 
sistent as the years pass, and may one day demand a prac- 
tical answer of the nation. 

The problem contains various elements; those of time, 
place and contingent physical conditions. In respect to 
place, the scene of such a conflict seems inexorably to be 



5o8 THE FAR EASTERN QUESTION 

limited, except minor manifestations, to the Pacific Ocean 
and countries contiguous to it. Thus the one fixed ele- 
ment is geographical, and this may be considered first. 

Japan and the United States are still remote from each, 
other, even under modern conditions. Ten days is now 
required for the fastest ship plying the Pacific to steam 
from Yokohama to San Francisco, while the shortest mail 
schedule now operating is twelve or thirteen days for a 
shorter run to Vancouver. Mail lines between Yoko- 
hama and San Francisco, via Honolulu, require sixteen 
days for the passage; ten from Yokohama to Honolulu, 
one day lie-over, and five days for the remainder of the 
distance. But America has possessions much nearer to 
Japan; the Philippines, Guam, Midway Island, Hawaii 
and Alaska. Remoteness in war is advantageous or dis- 
advantageous, according to whether a nation is acting on 
the defensive or offensive. In war the offensive or de- 
fensive often is determined by circumstances over which 
neither belligerent has, in the beginning, any control. It 
is probable that initiatory offensive or defensive in a 
war between Japan and the United States will be deter- 
mined by geography. Manila is nearly three times as far 
from San Francisco as from Nagasaki, and Guam is two 
and one-half times farther from the United States than 
from Japan. Honolulu is 2089 nautical miles from San 
Francisco, and 3445 miles from Yokohama. These places 
represent pieces in any naval and military game between 
Japan and the United States, and it is perhaps not neces- 
sary now to carry the purely geographical demonstration 
further. 

Turning to other elements, it is clear that the time 
when such a war may be fought has an important bearing. 
We cannot penetrate the future to any distance, and so 
speculation, to have practical value, mwst be confined to a 



AMERICA'S POSITION 509 

period when conditions may be foreseen with tolerable ac- 
curacy, which in this case does not exceed twenty years. 
Beyond this, modification of material conditions, through 
territorial acquisition or relinquishment by both or either 
nation, or evolution in transportation and implements of 
war, renders conjecture futile. In fact, ten years may be 
set as a reasonable limit for prognostication, for experts 
hold the view that if Japan decides to court an extreme is- 
sue with the United States she will do so before the comple- 
tion of the Panama canal. So here a certain limitation of 
time applies; and this period may be again divided into 
two periods of five years each, defined by practical consid- 
erations which I will demonstrate later. 

The remaining element of physical conditions affords 
a more interesting field for speculation, because these are 
so numerous and variable, and I first will predicate the 
discussion upon conditions as they approximately will ex- 
ist during the next five years. A vital factor is the naval 
strength of the two nations. So many statements of pres- 
ent and prospective navies of Japan and the United States 
recently have been published that it is unnecessary to pre- 
sent one here, it being perhaps enough to say that there 
is a considerable aggregate preponderance in our favor, and 
that probable and possible ratios of increase accrue to the 
further advantage of America. The armies of the two 
nations need not be compared, since they cannot im- 
mediately be brought into collision, and must in the end, 
especially in case of America, first be recruited and organ- 
ized. Both nations easily can raise and equip armies as 
large as ever can be employed. A Japanese invasion of 
the United States or an American invasion of Japan do 
not require detailed consideration in this connection, and 
may be dismissed as being practically impossible under 
present conditions. 



510 THE FAR EASTERN QUESTION 

Should war begin, then, within five years, the United 
States would, if its major naval force should then be in the 
Atlantic ocean, be placed by circumstances on the defensive, 
and be confronted by the problem of protecting its posses- 
sions in the Pacific. Japan's chief effort probably would 
be directed against the Philippines : but the order of pro- 
cedure might be varied. Some experts hold that Japan 
would, immediately on the outbreak of war, dispatch an 
expedition to take Manila and seize the islands, confining 
her effort for the time to these operations. Others think 
that she would first endeavor to cut our line of communi- 
cations with the Philippines, by seizing Guam and Hawaii, 
thus making the task of defending the Philippines harder, 
and vastly increasing the difficulty of retaking them should 
they succumb early in the struggle. We need accept, at 
present, neither of these views; but as much the same 
propositions are involved in both undertakings, and a solu- 
tion of one applies directly to the other, I will first discuss 
the probabilities involved in a Japanese attempt to take 
Hawaii. 

In its relation to the general defense of our possessions 
in the Pacific, Hawaii is Important only as a stepping stone 
on the way across. As long as we retain a foothold there, 
we have a base whence further operations can penetrate, 
and which dominates the whole area of the central Pacific. 
With Hawaii in Japan's possession, we would be tre- 
mendously handicapped in attempting to defend the Phil- 
ippines, and the American coast would be open to Japa- 
nese naval Incursions. Notwithstanding that this has 
been understood at Washington for years, the establish- 
ment of a defendable naval and military base In Hawaii 
has progressed very slowly. Pearl Harbor, near Hono- 
lulu, has been selected for a naval base, and preparations 
for its protection and defense begun. Should war begin 



AMERICA'S POSITION 511 

before its defenses are completed, the defense of this es- 
sential outpost would depend upon hastily constructed for- 
tifications, and such military force as could quickly be as- 
sembled there. 

As the importance of striking the first effective blow in 
war is appreciated by governments, diplomatic nego- 
tiations which immediately precede a rupture usually 
are conducted with a view to the military and naval situa- 
tion when hostilities begin, each of the prospective bellig- 
erents endeavoring to secure advantage. A striking exam- 
ple of success of this nature was given by Japan at the be- 
ginning of war against Russia, when the Russian fleet at 
Port Arthur was surprised and seriously damaged by the 
Japanese fleet, and Russian ships at Chemulpo, Korea, 
were destroyed. This was accomplished through the 
circumstances (although Russian stupidity played a part) 
which gave Japan control of telegraphic connection with 
Korea, enabling her to cut off the Russian minister in 
Seoul from communication with his Government for 
several days before hostilities were begun. Such practices 
are not countenanced by diplomatic canons, but history af- 
fords many instances where such advantage has been taken, 
and in dealing with Japan in the future any government 
will have such possibilities in mind. 

While there is no international rule exactly defining the 
matter, hostile collisions between nations nowadays usu- 
ally are preceded by a period of negotiation. In which the 
causes for complaint are mutually exchanged and a pre- 
sumed effort amicably to compromise them made. I use 
the word presumed because in many cases the preliminary 
negotiation is purely perfunctory, war having been fully 
decided upon by one or both nations before the exchange 
of the first diplomatic parler. When war comes from 
such conditions, the nation taking initiative (usually 



512 THE FAR EASTERN QUESTION 

attended by a depreciatory attitude and disclaimer of hos- 
tile intent) certainly will have been actively preparing for 
months, even for years, and the larger national interests 
will have been warned to shape their affairs for the ap- 
proaching conflict. The necessity for doing this, and the 
practical impossibility of long keeping such moves secret, 
provides, as a rule, ample notice to those with eyes to see, 
and makes it difficult for a wide-awake government to be 
completely surprised. 

In respect to Japan and the United States It reasonably 
may be assumed that no crucial diplomatic issue between 
them will be raised unless one nation Is resolved upon 
war provided satisfaction Is not obtained. This does not 
take into account, of course, peccadillos advanced from 
time to time on account of requirement of Internal politics, 
or by way of general diplomatic offsets. Assuming an 
Intention to bring on war, or expectation that war may 
result from a diplomatic contretemps (for no government 
will commit Itself without first estimating the cost), It Is 
probable that at least two months will elapse between the 
first preliminary note and a rupture. It Is fair to pre- 
sume that this Interim will be used by both governments 
to make such preparations as they can without taking 
action which would Immediately precipitate hostilities. 
Actions which, under such conditions, may be construed as 
actual acts of hostility, are not specifically defined, and 
always must be judged In conjunction with all the sur- 
rounding circumstances; but some are fully recognized, as 
a movement of large bodies of troops to a contiguous 
frontier, or the concentration of a naval force where it 
may threaten an Important possession of the prospective 
enemy. Steps of a government to protect Its exposed pos- 
sessions by strengthening their defenses, where such addi- 
tion of force does not at the same time threaten some pos- 



AMERICA'S POSITION 513 

session of the prospective enemy, cannot legitimately be 
considered acts of overt hostility, although wars often 
have been commenced on such pretexts. Thus, In the 
event of a serious Issue between Japan and the United 
States, and while negotiations are pending, for the United 
States to accelerate work on fortifications at Manila and 
Honolulu, and Increase the garrisons there could not justly 
be criticized. 

It safely may be assumed that under circumstances like 
this the United States Government would recognize the ex- 
posed position of Its possessions In the Pacific and consider 
ways and means to protect them. Leaving for the time 
the Philippines out of consideration, let us see what Is 
Involved In a defense of Hawaii under conditions as they 
now exist and will approximately obtain for several years. 
Should the Government neglect, with a number of trans- 
ports lying Idle In Pacific coast ports, to reinforce the garri- 
son at Honolulu until it became evident that a rupture was 
Inevitable, there still would be time to dispatch an ade- 
quate force provided prompt action was taken. By char- 
tering a few additional ships. It would be possible to land 
a force of 25,000 men at Honolulu within ten days after 
the movement was commenced. With such a force would 
go supplies of all kinds. Including artillery, and guns 
for fortification and coast defense, even If such had not 
already been dispatched. As the defense of Hawaii turns 
on security of a naval base there, the officers entrusted 
with this duty would not concern themselves with the other 
islands, but would confine their efforts to holding Pearl 
Harbor and Honolulu from Japanese attack. Thou- 
sands of men would be set to work upon fortifications, and 
while nothing comparable to Port Arthur or Sebastopol 
could quickly be created, a few weeks would be quite 
enough to establish a system of defensive works which 



514 THE FAR EASTERN QUESTION 

could not be taken by assault of any except a land force of 
greatly superior numbers. It hardly is necessary to say 
that any naval force which could be assembled by Japan 
at Hawaii could not, unaided by troops, occupy Pearl 
harbor or Honolulu in the face of serious opposition from 
troops on land. 

But these questions arise: What might Japan do to 
prevent the reinforcement of Hawaii by a force large 
enough to hold a base for some time, and failing to do this, 
what force could she bring to attack and capture it ! 

First to be considered is whether Japan would be able 
to prevent the landing in Hawaii of reinforcements from 
America, for should she succeed In this it would greatly 
modify the difficulties in the way of her occupation of 
the islands, since her navy, supplemented by compara- 
tively few troops, would suffice for the undertaking. It is 
clear that reinforcement from America only could be pre- 
vented by Intercepting our transports with ships of the 
Japanese navy, and this leads to examination of the 
conditions involved, and the probable distribution of the 
two navies when the breach came. By withdrawing all 
battleships from the Asiatic naval station the United States 
Government inaugurated a new policy, which may be pur- 
sued for several years. This policy is based on the theory 
that our only prospective naval opponent in Asiatic waters 
is Japan, and that unless we are prepared to maintain a bat- 
tleship fleet there capable of meeting the Japanese battle- 
ship fleet with a fair chance to defeat or cripple it, it is 
worse than useless to have any there at all, for it would be 
isolated and might be fruitlessly sacrificed. So our Asiatic 
fleet now consists of small cruisers and gunboats, and a 
small torpedo flotilla. Should war with Japan come while 
this condition exists, the cruisers and perhaps some smaller 
boats would be withdrawn at least to Honolulu before the 



AMERICA'S POSITION 515 

break came, and probably to San Francisco, where they 
would unite with the cruisers and battleships of the Pacific 
fleet, forming quite a formidable force ; not, under the pres- 
ent tactical distribution of the American navy, one capable 
of successfully encountering the major Japanese fleet, but 
potent enough to compel Japanese naval officers to reckon 
with its existence. Between Manila and the United States 
is a telegraph cable, touching at Guam, Midway and Hon- 
olulu, which will be controlled in war by the Govern- 
ment. Fast cruisers, equipped with wireless apparatus, 
undoubtedly would be stationed at Guam and Midway 
pending and immediately following the outbreak of hos- 
tilities. Such ships could cruise about the sea routes 
between Japan and America, and report should a Japanese 
fleet be sighted. In this way Honolulu and the Govern- 
ment at Washington could receive warning should any 
Japanese fleet take the seas. Even assuming that a Jap- 
anese fleet should take time by the forelock, and leave its 
base in Japan before diplomatic negotiations were broken 
off, as was done at the beginning of war against Russia, 
but little time could be gained, for such a move would soon 
be detected, and the Japanese Government would hardly 
risk sending a fleet to sea and losing communication with 
It until a rupture was only a matter of hours, or a day at 
most. 

A Japanese fleet capable of defeating the combined 
Asiatic and Pacific American fleets at their normal strength 
must include battleships and armored cruisers, and should, 
to be effective, be confined to ships of wide steaming 
radius. As things now are, once a Japanese fleet sailing 
eastward left Japan It would have no place to coal, except 
at sea, until It secured a foothold on American territory, or 
returned to Japan. No Japanese battleship, and but few 
of the larger cruisers, can carry enough coal to cross the 



5i6 THE FAR EASTERN QUESTION 

sailing route between Honolulu and San Francisco, 
cruise there for a time, and return to Japan without exer- 
cising great economy: and this would make the outbound 
voyage somewhat slow. It is not probable, therefore, that 
a Japanese fleet of any magnitude could intercept com- 
merce between America and Hawaii until ten days 
after hostilities commenced, which is the time I have al- 
lowed for our Government to send reinforcements. It 
should be remembered, in this connection, that by fast 
steaming (for coal economy is no object here) a transport 
can get from San Francisco to Honolulu in six days, and 
some of the Pacific Mail liners can make it in less time. 
It seems, then, that only gross negligence and sloth on the 
part of American authorities could prevent the assembly 
in Hawaii of a force of 25,000 troops, with supplies for 
several months, before a Japanese naval force could inter- 
rupt its transport. 

Should this reinforcement be accomplished, the problem 
takes another aspect. Any Japanese attack directed 
against Hawaii must now be prepared to encounter this 
American force, which we will assume to be Isolated by 
withdrawal of the American naval force, except pos- 
sibly some sub-marines, to the Pacific coast, there to await 
reinforcement from the Atlantic fleet. For the work of 
reducing and occupying fortified positions held by 25,000 
American troops, perhaps aided by a few thousand Ha- 
waiian volunteers, a Japanese army of at least 50,000 
would be required. This large army must be brought 
from Japan under convoy, for it would be quite possible 
for fast American cruisers to intercept the transport fleet, 
which would necessarily be large and unwieldy, and per- 
haps inflict serious loss. 

Two chief factors are Involved In this undertaking — 
the means employed and the time required. The means 



AMERICA'S POSITION 517 

for transport must be the Japanese merchant marine, and 
to convey a large army and its impedimenta many ships 
are needed. In time of peace the Japanese merchant 
marine is somewhat widely distributed. Japanese ship- 
ping lines using ships of considerable tonnage are chiefly 
those which ply to Europe, America and Australia, 
requiring long voyages. Of the 400,000 aggregate ton- 
nage of the Japanese steam merchant marine, three-fourths 
is in vessels of less than 3,000 tons, usually engaged in 
Far Eastern coastwise trade, and thus easily mobilized. 
Without giving further details which apply to this proposi- 
tion, it safely may be stated that it is not possible quickly to 
find marine transport in Japan for 50,000 troops, or half 
that number, without employing many of these little ships. 
Such vessels primarily are built with a view to econ- 
omy in operation, and as they are not designed for long 
voyages, as a rule, their coal carrying capacity Is small and 
their speed slow. The average Japanese coaster has a 
speed of about nine knots, often even less, on an econom- 
ical basis. As the test of the strength of a chain is its 
weakest link, so the speed of a fleet Is that of Its slowest 
vessel. Since to land a Japanese force in Hawaii piece- 
meal would be to Invite defeat In detachment, it would 
be necessary to transport a large army simultaneously. 
The problem is very different from that presented in 
Korea and Manchuria, where the marine transport resem- 
bled a ferry. It Is probable that the average speed of 
any transport fleet conveying a Japanese army to Hawaii 
would not be more than eight knots an hour. From one 
of the ports In Japan which would be the rendezvous for 
such a fleet to the Island of Oahu, on which Honolulu is 
situated. Is about 4,000 nautical miles; which means that 
it would take a Japanese army twenty days to reach 
Hawaii from the time It actually sailed from Japan. So 



5i8 THE FAR EASTERN QUESTION 

if we assume that the Japanese army had been loaded Into 
transports before war was declared (of which America 
would have ample notice, through mobilization of troops 
and ships, and other sources), three weeks would elapse 
before a Japanese soldier could land in Hawaii; three 
weeks for fortification and preparation. Those who may 
recall the feats In fortification sometimes accomplished 
by both armies In the American civil war within twenty- 
four hours or less, will realize that a good deal may be ac- 
complished In three weeks. 

Arriving at Oahu, the difficulties of landing would be 
presented. The island Is small, and Honolulu and Pearl 
Harbor are the only good landing places. Leaving oppo- 
sition out of consideration. If such an army and its im- 
pedimenta was landed In two weeks it would be a good 
job. Then it would have to settle down to take the 
American positions. It is not unreasonable to think that 
this task might occupy many weeks, even months. So it 
Is a fair presumption that Honolulu and Pearl Harbor 
might hold out for three months after war was declared. 
Assuming this, another element enters the proposition. 

This Is the American navy. When the battleship fleet 
made its famous trip around the Horn It provided an 
object lesson. What was then accomplished can be done 
again if necessary, and before three months from a decla- 
ration of war between the United States and Japan had 
passed a fleet of American battleships could reach San 
Francisco, and effect a junction with the fleet already there. 
This would establish the numerical superiority of the 
American navy in Pacific waters, and there would be noth- 
ing to prevent it from proceeding to Hawaii and there of- 
fering battle to the Japanese fleet. Should the Japanese 
fleet be defeated. It could hardly escape annihilation, for it 
would be 4,000 miles from a base wher,e repairs could be 



AMERICA'S POSITION 519 

made or whence reinforcement could come. And with the 
Japanese fleet annihilated, or even forced to relinquish con- 
trol of Hawaiian waters, the Japanese army in Hawaii 
would be at America's mercy. 

The considerations thus briefly enumerated lead me to 
believe that if there should be a war between Japan and 
the United States within five years Japan will make no 
serious attempt to occupy Hawaii, but will confine her en- 
deavors to an attack upon the Philippines. And the task 
of defending the Philippines is different from that of de- 
fending Hawaii. 



CHAPTER XXXVII 

AMERICA'S POSITION IN THE PACIFIC — 

Concluded 

Position of the Philippines — Present Insecurity- — 
American Troops in the Islands — Problem of Their 
Reinforcement — Possibility of a Prolonged War -^ Non- 
military Factors — Comparative Increase of Naval Arma- 
ments — Naval Construction in the United States — 
Finance and Economics — European Sympathy — The At- 
titude OF England — Japan's Disadvantages — The Sec- 
ond Period — A Breathing Spell — Preparedness an As- 
surance OF Peace — Deadlock About an Eastern Naval 
Base — Reasons for This — A Question of Sites — Pro- 
crastination Dangerous — Economies of the Proposition 
— A New American Naval Policy — America's Responsi- 
bility. 

The elements involved In a Japanese attack' upon the 
Philippines are the same as would be employed against 
Hawaii, with exception of the geographical factor. Ma- 
nila is about 1800 miles from Japan's military and naval 
bases, and is more than 5,000 miles from San Francisco. 
So no possible celerity of reinforcement, unless it was be- 
gun long before a breach occurred, could get American 
troops to the Philippines before a Japanese army could be 
landed there, and with Japan in command of Asiatic waters 
reinforcements could not be dispatched after war had com- 
menced. There are now about 12,000 American troops 
in the Philippines, but these are widely distributed, and 
cannot now entirely be withdrawn for mobilization at any 

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AMERICA'S POSITION 521 

point without permitting civil order in some localities to 
crumble. For the same reason the greater part of native 
scouts and constabulary cannot quickly be mobilized. 
While plans for a naval base at Olongapo or Cavite have 
been discussed for years, and some work on them has been 
accomplished, it is not now feasible to defend either place 
for more than a few weeks against a serious attack by land. 
Thus if war with Japan should come within the next few 
years, and its beginning find the greater part of the Ameri- 
can navy in the Atlantic ocean, it will hardly be possible to 
prevent Japanese from occupying the Philippines, and 
Guam and Midway as well. 

The United States would therefore be confronted from 
the beginning of such a war with the necessity of holding 
Hawaii, and then preparing to retake the Philippines. 
This would mean a prolonged and expensive conflict, for it 
need not be presumed that if the American people would 
ever enter upon such a war they would permit their Gov- 
ernment to abandon it until victory was secured or the fu- 
tility of further effort absolutely established. The prob- 
lems which would face the naval and military authorities 
of the United States would be : first, to wrest naval control 
of Asiatic waters from Japan; second, to use this control, 
when secured, to blockade the coast of Japan as effectively 
as possible, so as to cripple her trade and industry, and 
prevent reinforcement and supply of any Japanese force In 
the Philippines; third, to dispatch enough troops to the 
Philippines to defeat the Japanese armies there and re- 
cover possession of the islands. While to accomplish this 
is by no means impossible, it would be a difficult under- 
taking, and probably would require two or three years to 
complete. 

So prolonged a war would call Into play factors not 
purely military, which are of vital consequence. Increase 



522 THE FAR EASTERN QUESTION 

of naval armament is one of these progressive factors. 
The comparative slowness of naval construction in Amer- 
ica frequently has been pointed out as a weakness, but much 
of such criticism does not fully consider the circumstances. 
The United States Government does not give bonuses for 
quick construction as a rule, and where war ships are built 
by private companies it frequently happens that workmen 
will be taken off naval vessels and set to work upon ships 
for other uses, the reason being that Government work 
usually is not taken by shipwrights because it is profitable, 
but because it enables them to keep their workmen em- 
ployed In dull times. Many who have studied the situa- 
tion of ship-building in America hold the opinion that In 
emergency battleships can be built there as rapidly as any- 
where except in England, and more rapidly than In Japan. 
Should the United States become Involved in a war which 
turns upon naval supremacy, there Is no doubt that every 
ship yard In America would become busy with Government 
work, stimulated to extraordinary celerity by bonuses. An 
estimate of comparative naval construction facilities of Ja- 
pan and the United States which I recently saw calculates 
that during a war which may begin now or soon the Amer- 
ican navy can be augmented twice as rapidly as can the 
Japanese navy. This matter has another bearing. Practi- 
cally everything which enters into a modern fighting ship, 
and Is involved in the manufacture of military equipment, 
can be supplied in any quantity In the United States. This 
is not the case in Japan. While Japanese are proud of 
the fact that Japan has constructed her new Dreadnaughts 
at home, much of the material needed to build them 
was Imported. It will be some time before Japan is fully 
prepared to build a navy from keel to topmast for herself. 
In war such materials are contraband, and their importa- 
tion might be limited, and perhaps stopped altogether. 



AMERICA'S POSITION 523 

But probably the more important factor in a prolonged 
war between these nations would be that of finance and in- 
ternal economies. It is difficult to see how Japan can now 
sustain the financial and industrial strain of another great 
war, which might subject her domestic economies to a se- 
vere depression by cutting off raw materials necessary for 
her industries, depriving her products of markets abroad, 
and maybe even curtailing the food supply of her people. 
There are persons who pretend to believe, taking the idea, 
perhaps, from the disposition of European military and 
naval experts to predict disaster to American arms should 
we ever engage a formidable power, that European nations 
will sympathize with Japan in a conflict with us, from 
jealousy of our progress, and that this might enable Japan 
to finance a war. I accept no such view. Let anyone who 
does travel about the East and sound the sentiment of 
British and Europeans toward Japanese and Japan's Far 
Eastern policy. No ! Europe may have her little jeal- 
ousies and fears concerning us, but they are as nothing to 
sentiment involved in the question whether the white or 
yellow race shall dominate the future of civilization, which 
would be an issue of such a conflict, and the importance of 
maintaining friendly intercourse with America because of 
interdependent commercial and industrial affiliations. In 
such a war public sentiment and statesmanship in Europe 
would, I believe, be almost solidly arrayed with the 
United States. 

Some commentators point to the fact that the Anglo- 
Japanese alliance requires England to support her ally 
should she be attacked, and argue that England would 
side against America. It is true that, viewed from a cer- 
tain angle, the alliance seems to demand such action, and 
should England be arrayed against the United States in 
conjunction with Japan the whole problem would be al- 



524 THE FAR EASTERN QUESTION 

tered. We would lose the Philippines, but we would gain 
Canada, and be pleased with the exchange. Let none 
think that England will become Japan's cat's-paw in this 
matter. It is not conceivable that the United States ever 
will come into collision with Japan, or another nation in 
the East, except in defense of American interests in Asia 
which, by contravening existing international covenants, 
may be trampled upon by any of them, or because of dis- 
position by any nation to dispute America's right to regu- 
late her internal affairs. For instance, no reasonable in- 
terpretation of the Anglo-Japanese alliance can stretch it 
to invoke England's interference in the immigration Issue 
between Japan and America, or in an issue which might 
arise between these nations concerning the " open door " 
in China. It is doubtful, when present disposition of 
Britishers toward it is considered, if the Anglo- Japanese 
alliance now has any real vitality. A feeling that Great 
Britain entered into this agreement without correctly es- 
timating its possibilities is now noticeable in England, while 
the once popular pact is execrated by Britishers in the East, 
and frowned upon in the Antipodes. Apart from the alli- 
ance's loss of sentimental vitality, we may be assured that 
so long as Great Britain holds Canada and desires to retain 
that noble dominion she will remain neutral in any war be- 
tween Japan and the United States, even if our alleged 
cousinship should prove a chimera. 

So in estimating probabilities of a war with Japan, it 
appears that Japan's fiscal and economic situation, coupled 
with comparative naval weakness, gives reasonable assur- 
ance that she will not provoke a breach with the United 
States before several years have passed; and this brings us 
to the second period. The problem which will be pre- 
sented in a war between Japan and the United States after 
five years depends almost entirely upo^ the course pur- 



AMERICA'S POSITION 525 

sued by our Government meanwhile. Unless the Wash- 
ington administration and Congress fail in their plain 
duty, five years will find our navy substantially increased 
and on a more efficient status, military and naval bases 
in the Philippines, Hawaii and Guam fully equipped, and a 
practical scheme for defense of our possessions In the Pa- 
cific Ocean arranged. Such a condition will materially alter 
the situation, and will enable us to meet Japan or any other 
nation at so much greater vantage than we can do now that 
Its very existence will be a substantial guarantee of peace. 
A base In the Philippines which can. If occasion demands, 
withstand a land attack for six months is needed. 

The problem of defending a naval base In the Philip- 
pines turns upon several factors : the strength of the force 
which might be brought against It, the time which must 
elapse between the declaration of war and the Investment, 
and difficulties which conditions and artifice may inter- 
pose between the enemy and his object. The time re- 
quired to bring an army to attack a base in the Philip- 
pines Is dependable upon Its numbers, for a small force 
can more quickly be transported than a large one; 
while the obstacles will be modified by the same consid- 
erations and by the size and preparedness of the defend- 
ing force. It Is quite profitless In discussing these ques- 
tions to assume, as many commentators do, that we will 
not upon the outbreak of a possible war be prepared to 
defend any base in these Islands. To estimate and 
weigh probabilities it Is necessary to assume that a base 
has been created, and that adequate provisions for 
Its defense have been made. Unless this Is assumed. It Is 
useless to discuss advantages or disadvantages of this or 
that proposed site, for these must be estimated not so much 
for what they now are as by what can be made of them. 
So I will assume that should the United States after five 



526 THE FAR EASTERN QUESTION 

years become involved In a war with an Asiatic power it 
will have a naval base in the Philippines, and have made 
intelligent preparations for its defense. 

Assuming this, it would be necessary for an enemy to 
make preparations accordingly, and in estimating fac- 
tors applicable to the proposition we have the advantage 
of being able to turn to similar operations recently con- 
ducted by our only theoretically prospective opponent — 
Japan. It cannot reasonably be assumed that Japan will 
for many years be able to begin a war so well prepared as 
she was when war against Russia started. It is now 
known that she had mobilized troops and loaded them 
upon transports before negotiations were terminated; in- 
deed, some actually were dispatched upon a hostile mis- 
sion before diplomatic relations were severed. As an 
example of preparedness and celerity this hardly can be 
surpassed. The chief immediate object was to capture 
the Russian naval base and fortress at Port Arthur, which 
lies less than sixty hours away from Japan. With this 
fortunate proximity, together with the fact that land 
operations on the Kwang-tung peninsula present no ex- 
traordinary natural difficulties, and that a good landing 
place at Dalny was speedily acquired, the actual in- 
vestment of Port Arthur did not begin until several months 
after hostilities commenced. By actual investment I 
mean when the Japanese army in force was in direct con- 
tact with outer defenses of the fortress. The loss of the 
Nanshan isthmus, and consequent cutting of railway com- 
munication with the north had, of course, practically iso- 
lated Port Arthur before this time ; but the pressure upon 
its defenses had not begun. Ten months after war was 
declared the place was surrendered. It might have re- 
sisted for months longer; but when Japanese reached po- 
sitions from where the fire of large guns could reach the 



AMERICA'S POSITION 527 

harbor, the value of the port as a naval base was destroyed. 

It cannot reasonably be assumed that in a war with the 
United States Japan can now land a large army in the 
Philippines more quickly than she landed one on the 
Kwang-tung peninsula, or in Manchuria and Korea; in 
fact, the presumption is that more time will be required. 
The landing of such an army being made possible by the 
absence of a considerable American naval force from 
Asiatic waters, the length of time required to reduce a 
fortress will depend upon natural and artificial obsta- 
cles. 

That the United States needs a fully equipped and well 
fortified naval base in the Far East has been recognized 
for years by those who have studied the situation, and 
that the present finds us without one is due to an interest- 
ing and rather extraordinary state of affairs. Naturally, 
such a base will be located in the Philippines, since these 
islands comprise our only territorial possessions in Asiatic 
waters, and afford many fairly satisfactory sites. When 
the islands were acquired from Spain we secured two so- 
called naval bases — those at Cavite and Olongapo. 
These yards were hardly worthy of the name in a modern 
sense, the facilities being limited to shops where minor 
repairs can be made. There was no dry dock at either 
place, although at Cavite small craft might be shored 
upon ways. Since then the important improvements 
have been erection of a coaling plant at Cavite, a 
similar plant at Olongapo, and placing of the floating 
dock Dewey at Olongapo. There have been additional 
quarters erected at Olongapo for the accommodation of 
officers and marines. On the whole, however, the work 
of improving these yards has stagnated, notwithstanding 
that with each passing year the need for proper facihties 
has become more pressing and important. 



528 THE FAR EASTERN QUESTION 

There are several reasons for this condition. The 
failure of Congress to make appropriations is one; but 
the real cause is failure of the War and Navy depart- 
ments to agree upon a site. In 1902 a naval board was 
ordered to examine and report upon sites in the Phihppines. 
Several were examined, but none except Cavite and Olon- 
gapo was seriously considered. The navy decided that 
Subig Bay, where Olongapo is situated, fulfils to a remark- 
able degree the natural requirements demanded. In time 
plans for an elaborate base at Olongapo were prepared, 
and have been waiting upon Congressional authoriza- 
tion. While Congress has been somewhat slow, perhaps 
reluctant to act in this matter, owing to uncertainty about 
our policy in the Philippines and failure tO' comprehend the 
importance of such a base, it is probable that the question 
of a site would have been decided before now and work 
definitely begun had not military and naval experts dis- 
agreed about it. Two factions sprang into existence; 
one favoring Olongapo, and the other Cavite. While 
each faction finds supporters in both the army and navy, 
it is generally true that the navy prefers Olongapo, while 
the army insists upon Cavite. 

It Is of greatest Importance to the United States 
that the deadlock about the site be broken, and work on 
a naval base In the Philippines be begun without fur- 
ther delay. This controversy somewhat resembles that 
which for so many years retarded progress upon an Isth- 
mian canal. Experts agreed that both the Panama 
and Nicaragua routes are practicable, but they disagreed 
as to their comparative merits, with a result that for many 
years nothing was done. I do not wish to appear in the 
role of alarmist, but the situation In the East Is such that 
to procrastinate In this matter Is little short of criminal 
neglect of the nation's Interests. The day may come, and 



AMERICA'S POSITION 529 

soon, when such a base will be worth ten Dreadnaughts 
to America; not necessarily in war, but as make-weight 
for peace. A chain of coaling stations stretching across 
the Pacific and linking America with a great fortress in 
the Far East may be likened to a strong arm extended 
with the fist at the western extremity, and presenting an 
obstacle which any enemy approaching America from that 
quarter must first overcome. 

The economics of an American naval base in the Far 
East also should be considered. Armies and navies are, 
in modern times, international police, and police cannot 
perform their functions without equipment and stations. 
If our navy Is to police our interests in the East it must 
have a station there. A proper station will cost millions, 
to be sure, but it should pay for itself within ten years in 
actual saving of dollars and cents. Before the drydock 
Dewey was brought to Olongapo It was necessary to send 
our naval vessels and army transports in eastern service 
to Hongkong or Nagasaki to be docked and overhauled. 
It has been estimated that already the Dewey has earned 
in the economy which her presence in the East makes pos- 
sible more than half the cost of her construction and de- 
livery there. At present vessels must be sent to the Atlan- 
tic or Pacific coast for serious repairs, thus Increasing cost 
of maintenance. The recent discovery of a fairly good 
quality of steaming coal In the Philippines will result In 
another economy In maintenance of an American fleet in 
the East, and the Government is preparing to open mines. 
With a naval base and cheap coal, for which It does not 
have to depend upon foreign assistance not available In 
war, America's naval position In Asiatic waters will be such 
as to make our eastern possessions secure, and will give our 
navy an offensive potency In that part of the world which 
will make wishes of the nation respected there. 



530 THE FAR EASTERN QUESTION 

I think the United States Government should fundamen- 
tally alter Its naval strategic policy. There seems small 
reason to doubt that until the Far Eastern situation passes 
the forthcoming crisis, and definitely settles upon a stable 
base, America's naval policy should be a Pacific Ocean pol- 
icy. This probably is recognized at Washington, but there 
seems to be a disposition to wait for the change until the 
Panama canal is opened. Why wait? I think, and I know 
that some American naval experts have the same opinion, 
that the United States should keep its major battleship 
fleet on the Pacific coast until the canal is open, its strength 
to be Increased in proportion to increase of the Japanese 
navy. This will assure security of Hawaii and the Philip- 
pines until naval bases there can be built and adequately 
fortified. Until it has defendable and properly equipped 
bases, to keep a large fleet in Asiatic waters Is useless, even 
foolish. And to defend American Interests In the East, 
our naval force should be able to take the aggressive if oc- 
casion demands. 

Many Americans will, doubtless," be disposed to ask: 
" Why go to this trouble to defend possessions which we 
do not need? Why not solve the difficulty by giving 
them up?" 

This question often has been heard In America In the 
past, and will be heard again In the future, but with dimin- 
ishing frequency and less Insistence. I have attempted 
to present some reasons Involving broader Interests of the 
nation, and Its future economic progress, which will com- 
pel our attention to the course of events In the Pacific. 
The military answer to such questions Is that It seems 
probable that eastern possessions, or at least a military 
foothold there, will be required for national security. la 
our possession they may serve as out-posts for our army 
and navy, where any attack coming from a wakened and 



AMERICA'S POSITION 531 

efficient Orient may be met and held. In Oriental pos- 
session they would make a path by which our own coast 
more easily can be reached. To those who are of- 
fended by all consideration of armaments, and who ob- 
ject on principle to expenditure of national revenue for 
such purposes, it may be said that as society has not yet 
reached that condition when it can dispense with police, 
so have not nations attained a comity when international 
police are unnecessary. Some oppose our retaining a bat- 
tleship fleet in the Pacific on the ground that its presence 
there may embroil the United States with an Oriental 
nation or may provoke a war. This is like assuming 
that the presence of a policeman is likely to foment dis- 
order, for I presume no one thinks that an American 
fleet will be wantonly aggressive anywhere. In my judg- 
ment, within the next five years to strip the Pacific of 
adequate naval force is like giving the police or fire- 
men of a city a holiday and hoping there will be no need 
for their services. A strong American policy in the Pacific 
should have the effect of giving steadiness and stability to 
the Eastern situation, thus supplying a powerful influence 
for peace. 

I cannot agree with those who seem to assume that care 
and effort of the United States to assure to American in- 
terests an equitable and advantageous share in develop- 
ment of the East is unbecoming, and involves an offense 
against either the inhabitants of those regions or the 
broad interests of humanity. The purposes and dealings 
of our nation and people are as just and beneficial 
as others likely to be applied to these propositions, and 
aspiration on our part to take a position in the world to 
which' our progress and Ideals entitle us is legitimate. 
Whether we wish it or not, we cannot escape increasing 
contact with Oriental nations and peoples, and it should 



532 AMERICA'S POSITION 

not be assumed that our closer relations with them will be 
to their disadvantage. On the contrary, American activ- 
ity, enterprise and influence, when representative of our in- 
stitutions, are, if applied to Oriental countries, likely to be 
as beneficial to Governments and natives of those coun- 
tries, and to all persons who reside there, as similar ac- 
tivities of other nations. While Americans pretend no 
altruistic motive in extending their national interests in 
the East, beyond the fact that they are pressed in a spirit 
of friendly reciprocity, I believe that the East will ben- 
efit more by extensive relations with us than we will 
through relations with it. The great wealth of the 
United States, and the energy and intelligence of our peo- 
ple, combine to give our Government enormous power in 
promoting its national interests throughout the world, 
and should it fail to accomplish what reasonably may be 
expected of it, the American people sternly will hold it to 
account. Of wider problems which confront our na- 
tion, the question of its present and future position in the 
Pacific Ocean, and its security, is second to none. 



APPENDIX 

The text of appended treaties, agreements and conventions is 
as given in W. W. Rockhill's compilation of treaties with or con- 
cerning China and Korea (1894- 1904), and in supplements to 
that volume officially published by the United States Government 
(1908). Appendix L is an unofficial copy, obtained, however, 
from semi-official sources. 



APPENDIX A. 

TREATY OF PEACE BETWEEN JAPAN AND RUSSIA. 

Signed at Portsmouth (New Hampshire), September 5 [Rus- 
sian calender], 1905. Ratifications exchanged at Washington, 
November 25, 1905. 

His Majesty the Emperor of Japan on the one part, and His 
Majesty the Emperor of all the Russias on the other part, ani- 
mated by the desire to restore the blessings of peace to Their 
countries and peoples, have resolved to conclude a Treaty of 
Peace, and have, for this purpose, named Their Plenipotentiaries, 
that is to say ; 

His Majesty the Emperor of Japan: 

His Excellency Baron Komura Jutaro, Jusammi, Grand Cor- 
don of the Imperial Order of the Rising Sun, His Minister for 
Foreign Affairs, and 

His Excellency M. Takahira Kogoro, Jusammi, Grand Cordon 
of the Imperial Order of the Sacred Treasure, His Envoy Extra- 
ordinary and Minister Plenipotentiary to the United States of 
America; and 

His Majesty the Emperor of all the Russias: 

533 



534 APPENDIX 

His Excellency M. Serge Witte, His Secretary of State and 
President of the Committee of Ministers of the Empire of Rus- 
sia, and 

His Excellency Baron Roman Rosen, Master of the Imperial 
Court of Russia and His Ambassador Extraordinary and Plenipo- 
tentiary to the United States of America; 

Who, after having exchanged their full powers which were 
found to be in good and due form, have concluded the following 
Articles : 

Article I. 

There shall henceforth be peace and amity between Their Maj- 
esties the Emperor of Japan and the Emperor of all the Russias 
and between Their respective States and subjects. 

Article II. 

The Imperial Russian Government, acknowledging that Japan 
possesses in Korea paramount political, military and economical 
interests, engage neither to obstruct nor interfere with the meas- 
ures of guidance, protection and control which the Imperial Gov- 
ernment of Japan may find it necessary to take in Korea. 

It is understood that Russian subjects in Korea shall be treated 
exactly in the same manner as the subjects or citizens of other 
foreign Powers, that is to say, they shall be placed on the same 
footing as the subjects or citizens of the most favoured nation. 

It is also agreed that, in order to avoid all cause of misunder- 
standing, the two High Contracting Parties will abstain, on the 
Russo-Korean frontier, from taking any military measure which 
may menace the security of Russian or Korean territory. 

Article III. 

Japan and Russian mutually engage: 

1. To evacuate completely and simultaneously Manchuria 
except the territory affected by the lease of the Liao-tung Penin- 
sula, in conformity with the provisions of additional Article I. 
annexed to this Treaty; and 

2. To restore entirely and completely to the^ exclusive adminis- 



APPENDIX 535 

tration of China all portions of Manchuria now in the occupa- 
tion or under the control of the Japanese or Russian troops, with 
the exception of the territory above mentioned. 

The Imperial Government of Russia declare that they have not 
in Manchuria any territorial advantages or preferential or ex- 
clusive concessions in impairment of Chinese sovereignty or in- 
consistent with the principle of equal opportunity. 

Article IV. 

Japan and Russia reciprocally engage not to obstruct any gen- 
eral measures common to all countries, which China may take for 
the development of the commerce and industry of Manchuria. 

Article V. 

The Imperial Russian Government transfer and assign to the 
Imperial Government of Japan, with the consent of the Govern- 
ment of China, the lease of Port Arthur, Talien and adjacent 
territory and territorial waters and all rights, privileges and con- 
cessions connected with or forming part of such lease, and they 
also transfer and assign to the Imperial Government of Japan all 
public works and properties in the territory affected by the above 
mentioned lease. 

The two High Contracting Parties mutually engage to obtain 
the consent of the Chinese Government mentioned in the forego- 
ing stipulation. 

The Imperial Government of Japan on their part undertake 
that the proprietary rights of Russian subjects In the territory 
above referred to shall be perfectly respected. 

Article VI. 

The Imperial Russian Government engage to transfer and as- 
sign to the Imperial Government of Japan, without compensation 
and with the consent of the Chinese Government, the railway 
between Chang-chun (Kuan-cheng-tze) and Port Arthur and all 
its branches, together with all rights, privileges and properties ap- 
pertaining thereto in that region, as well as coal mines in the said 
region belonging to or worked for the benefit of the railway. 



S36 APPENDIX 

The two High Contracting Parties mutually engage to obtain 
the consent of the Government of China mentioned in the fore- 
going stipulation. 

Article VII. 

Japan and Russia engage to exploit their respective railways in 
Manchuria exclusively for commercial and industrial purposes and 
in no wise for stategic purposes. 

It is understood that that restriction does not apply to the rail- 
way in the territory affected by the lease of the Liao-tung Penin- 
sula. 

Article VIII. 

The Imperial Governments of Japan and Russia, with a view 
to promote and facilitate intercourse and traffic, will, as soon as 
possible, conclude a separate convention for the regulation of 
their connecting railway service in Manchuria. 

Article IX. 

The Imperial Russian Government cede to the Imperial Gov- 
ernment of Japan in perpetuity and full sovereignty, the southern 
portion of the Island of Saghalien and all islands adjacent thereto, 
and all public works and properties thereon. The fiftieth degree 
of north latitude is adopted as the northern boundary of the ceded 
territory. The exact alignment of such territory shall be de- 
termined in accordance with the provisions of additional Article 
II. annexed to this Treaty. 

Japan and Russia mutually agree not to construct in their re- 
spective possessions on the Island of Sagh'alien or the adjacent 
islands, any fortifications or other similar military works. They 
also respectively engage not to take any military measures which 
may impede the free navigation of the Straits of La Perouse and 
Tartary. 

Article X. 

It Is reserved to the Russian subjects Inhabitants of the territory 
ceded to Japan, to sell their real property and ,retire to their coun- 



APPENDIX 537 

try; but, if they prefer to remain in the ceded territory, they will 
be maintained and protected in the full exercise of their industries 
and rights of property, on condition of submitting to Japanese 
laws and jurisdiction. Japan shall have full liberty to withdraw 
the right of residence in, or to deport from, such territory, any 
inhabitants who labour under political or administrative disability. 
She engages, however, that the proprietary rights of such inhabi- 
tants shall be fully respected. 

Article XI. 

Russia engages to arrange with Japan for granting to Japanese 
subjects rights of fishery along the coasts of the Russian possessions 
in the Japan, Okhotsk and Behring Seas. 

It is agreed that the foregoing engagement shall not affect rights 
already belonging to Russian or foreign subjects in those regions. 

Article XII . 

The Treaty of Commerce and Navigation between Japan and 
Russia having been annulled by the war, the Imperial Governments 
of Japan and Russia engage to adopt as the basis of their com- 
mercial relations, pending the conclusion of a new treaty of com- 
merce and navigation on the basis of the Treaty which was in 
force previous to the present war, the system of reciprocal treat- 
ment on the footing of the most favoured nation, in which are 
included import and export duties, customs formalities, transit and 
tonnage dues, and the admission and treatment of the agents, sub- 
jects and vessels of one country in the territories of the other. 

Article XIII. 

As soon as possible after the present Treaty comes into force, all 
prisoners of war shall be reciprocally restored. The Imperial Gov- 
ernments of Japan and Russia shall each appoint a special Com- 
missioner to take charge of prisoners. All prisoners in the hands 
of one Government shall be delivered to and received by the Com- 
missioner of the other Government or by his duly authorized 
representative, in such convenient numbers and at such convenient 



538 APPENDIX 

ports of the delivering State as such delivering State shall notify 
in advance to the Commissioner of the receiving State. 

The Governments of Japan and Russia shall present to each 
other, as soon as possible after the delivery of prisoners has been 
completed, a statement of the direct expenditures respectively in- 
curred by them for the care and maintenance of prisoners from 
date of capture or surrender up to the time of death or delivery. 
Russia engages to repay to Japan, as soon as possible after the 
exchange of the statements as above provided, the difference be- 
tween the actual amount so expended by Japan and the actual 
amount similarly disbursed by Russia. 

Article XIV. 

The present Treaty shall be ratified by Their Majesties the 
Emperor of Japan and the Emperor of all the Russias. Such 
ratification shall, with as little delay as possible and in any case 
not later than fifty days from the date of the signature of the 
Treaty, be announced to the Imperial Governments of Japan and 
Russia respectively through the French Minister in Tokyo and 
the Ambassador of the United States in Saint-Petersburg and from 
the date of the later of such announcements this Treaty shall in all 
its parts come into full force. 

The formal exchange of the ratification shall take place at 
Washington as soon as possible. 

Article XV. 

The present Treaty shall be signed in duplicate in both the 
English and French languages. The texts are in absolute con- 
formity, but in case of discrepancy in interpretation, the French 
text shall prevail. 

In witness whereof the respective Plenipotentiaries have signed 
and affixed their seals to the present Treaty of Peace. 

Done at Portsmouth (New Hampshire) this fifth day of the 
ninth month of the thirty-eighth year of Meiji, corresponding to 
the twenty- third day of August (fifth September) one thousand 
nine hundred and five. 

(Signed) Se^geWitte, [l.s.] 



APPENDIX 539 

(Signed) Rosen, [l.s.] 
(Signed) Jutaro Komura. [l.s.] 
(Signed) K. Takahira. [l.s.] 
In conformity with the provisions of Articles III and IX of the 
Treaty of Peace between Japan and Russia of this date, the under- 
signed Plenipotentiaries have concluded the following additional 
Article : 

I. To Article III. 

The Imperial Governments of Japan and Russia mutually en- 
gage to commence the withdrawal of their military forces from the 
territory of Manchuria simultaneously and immediately after the 
Treaty of Peace comes into operation, and within a period of 
eighteen months from that date, the Armies of the two countries 
shall be completely withdrawn from Manchuria except from the 
leased territory of the Liao-tung Peninsula. 

The forces of the two countries occupying the front positions 
shall be first withdrawn. 

The High Contracting Parties reserve to themselves the right 
to maintain guards to protect their respective railway lines in 
Manchuria. The number of such guards shall not exceed fifteen 
per kilometre and within that maximum number, the Commanders 
of the Japanese and Russian Armies shall, by common accord, fix 
the number of such guards to be employed, as small as possible 
having in view the actual requirements. 

The Commanders of the Japanese and Russian forces in Man- 
churia shall agree upon the details of the evacuation in conformity 
with the above principles, and shall take by common accord the 
measures necessary to carry out the evacuation as soon as possible 
and in any case not later than the period of eighteen months. 

II. To Article IX. 

As soon as possible after the present Treaty comes into force, a 
Commission of Delimitation, composed of an equal number of 
members to be appointed respectively by the two High Contract- 
ing Parties, shall on the spot, mark in a permanent manner the 
exact boundary between the Japanese and Russian possessions on 



540 APPENDIX 

the Island of Saghalien. The Commission shall be bound, so 
far as topographical considerations permit, to follow the fiftieth 
parallel of north latitude as the boundary line, and in case any 
deflections from that line at any points are found to be necessary, 
compensation will be made by correlative deflections at other points. 
It shall also be the duty of the said Commission to prepare a list and 
description of the adjacent islands included in the cession and 
finally the Commission shall prepare and sign maps showing the 
boundaries of the ceded territory. The work of the Commission 
shall be subject to the approval of the High Contracting Parties. 

The foregoing additional Articles are to be considered as ratified 
with the ratification of the Treaty of Peace to which they are an- 
nexed. 

Portsmouth, the 5th day, 9th month, 38th year of Meiji, corre- 

T 1 23rd August, 1 

spondmg to the , ^ , M905. 

5th September, J 

(Signed) Serge Witte. (Signed) J. Komura. 

(Signed) Rosen. (Signed) K. Takahira. 



APPENDIX B. 



CONVENTION BETWEEN JAPAN AND RUSSIA. 
Signed July 30, 1907. 

The Government of his Majesty the Emperor of Japan and the 
Government of his Majesty the Emperor of All the Russias, de- 
siring to consolidate the relations of peace and good neighbour- 
hood which have happily been re-established between Japan and 
Russia, and wishing to remove for the future every cause of mis- 
understanding in the relations of the two Empires, have agreed 
to the following arrangements : — 

Art. I. — Each of the High Contracting Parties engages to re- 
spect the actual territorial integrity of the other, and all the rights 
accruing to one and the other Party from treaties, conventions and 
contracts in force between them and China, copies of which have 



APPENDIX 541 

been exchanged between the Contracting Parties (in so far as these 
rights are not incompatible with the principle of equal opportunity) 
of the Treaty signed at Portsmouth on the 5th day of September 
(23rd of August) 1905, as well as the special conventions con- 
cluded between Japan and Russia. 

Art. II. — The two High Contracting Parties recognise the in- 
dependence and the territorial integrity of the Empire of China 
and the principle of equal opportunity in whatever concerns the 
commerce and industry of all nations in that empire, and engage 
to sustain and defend the maintenance of the status quo and respect 
for this principle by all the pacific means within their reach. 

In witness whereof, the undersigned, duly authorized by their 
respective Governments, have signed this Convention and have 
affixed their seals. 

Done at St. Petersburg, the 30th day of the 7th month of the 
40th year of Meiji, corresponding to the 30th (17th) of July 1907. 

(Signed) I. Motono. 

(Signed) Iswolsky. 



APPENDIX C. 

TREATY AND ADDITIONAL AGREEMENT BE- 
TWEEN JAPAN AND CHINA RELATING 
TO MANCHURIA. 

Signed at Peking, December 22, 1905. 
Ratifications Exchanged at Peking, January 23, 1906. 

[Translation.] 

His Majesty the Emperor of Japan and His Majesty the Em- 
peror of China, desiring to adjust certain matters of common 
concern growing out of the Treaty of Peace between Japan and 
Russia of September 5th, 1905, have resolved to conclude a 
Treaty with that object in view and have for that purpose named 
Their Plenipotentiaries, that is to say: 

His Majesty the Emperor of Japan : 



542 APPENDIX 

Baron Komura Jutaro, Jusammi, Grand Cordon of the Im- 
perial Order of the Rising Sun, Minister for Foreign Affairs and 
Special Ambassador of His Majesty, and 

Uchida Yasuya, Jushii, Second Class of the Imperial Order of 
the Rising Sun, His Majesty's Envoy Extraordinary and Minister 
Plenipotentiary ; and 

His Majesty the Emperor of China: 

Prince Ching, Presiding Minister for Foreign Affairs, Coun- 
cillor of State and Plenipotentiary of His Majesty, 

Chu Hung-chi Minister for Foreign Affairs, Councillor of State 
and Plenipotentiary of His Majesty, and 

Yuan Shih-Kai, Viceroy of the Province of Chihli, Junior Guar- 
dian of the Heir-Apparent, Minister Superintendent of Trade for 
the Northern Ports and Plenipotentiary of His Majesty; 

Who, after having exchanged their full powers which were found 
to be in good and due form, have agreed upon and concluded the 
following Articles: 

Article I. 

The Imperial Chinese Government consent to all the transfers 
and assignments made by Russia to Japan by Artices V and VI of 
the Treaty of Peace above mentioned. 

Article II. 

The Imperial Japanese Government engage that in regard to 
the leased territory as well as in the matter of railway construc- 
tion and exploitation, they will, so far as circumstances permit, 
conform to the original agreements concluded between China and 
Russia. In case any question arises in the future on these sub- 
jects, the Japanese Government will decide it in consultation with 
.the Chinese Government. 

Article III. 

The present Treaty shall come into full force from the date of 
signature. It shall be ratified by Their Majesties the Emperor of 
Japan and the Emperor of China and the ratifications shall be ex- 



APPENDIX 543 

changed at Peking as soon as possible, and not later than two 
months from the present date. 

In witness whereof, the respective Plenipotentiaries have signed 
this Treaty in duplicate in the Japanese and Chinese languages and 
have thereto affixed their seals. 

Done at Peking, this twenty-second day of the twelfth month of 
the thirty-eighth year of Meijij corresponding to the twenty-sixth 
day of the eleventh moon of the thirty-first year of Kuang Hsii. 
(Signed) Baron Komura Jutaro^ [l.s.] 

Jusammi, Grand Cordon of the Imperial Order 
of the Rising Sun, Minister for Foreign Af- 
fairs and Special Ambassador of His Majesty 
the Ernperor of Japan. 
(Signed) Uchida Yasuya, [l.s.] 

Jushii, Second Class of the Imperial Order of 
the Rising Sun, Envoy Extraordinary and Min- 
ister Plenipotentiary of His Majesty the Em- 
peror of Japan. 
(Signed) Prince Ching, [l.s.] 

Presiding Minister for Foreign Affairs, Coun- 
cillor of State and Plenipotentiary of His Maj- 
esty the Emperor of China. 
(Signed) Chu Hung-chi, [l.s.] 

Minister for Foreign Affairs, Councillor of State 
and Plenipotentiary of His Majesty the Em- 
peror of China. 
(Signed) Yuan Shih-kai, [l.s.] 

Viceroy of the Province of Chihli, Junior Guar- 
dian of the Heir-Apparent, Minister Superin- 
tendent of Trade for the Northern Ports and 
Plenipotentiary of His Majesty the Emperor 
of China. 
The Governments of Japan and China, with a view to regulate, 
for their guidance, certain questions in which they are both inter- 
ested in Manchuria, in addition to those provided for in the 
Treaty signed this day, have agreed as follows; 



544 APPENDIX 

Article I. 

The Imperial Chinese Government agree that as soon as pos- 
sible after the evacuation of Manchuria by the Japanese and 
Russian forces, the following cities and towns in Manchuria will 
be opened by China herself as places of international residence 
and trade: 

In the Province of Shingking: 
Fengwangcheng ; Liaoyang; Hsinmintum; Tiding; Tung- 
kiangtzu and Fakumen. 
In the Province of Kirin: 
Changchun (Kuanchengtze) ; Kirin; Harbin; Ninguta; 
Hunchun and Sanhsing. 
In the Province of Heilungkiang : 

Tsitsihar; Hailar, Aihun and Manchuli. 

Article II. 

In view of the earnest desire expressed by the Imperial Chinese 
Government to have the Japanese and Russian troops and railway 
guards in Manchuria withdrawn as soon as possible, and in order 
to meet this desire, the Imperial Japanese Government, in the event 
of Russia agreeing to the withdrawal of her railway guards, or in 
case other proper measures are agreed to between China and Russia, 
consent to take similar steps accordingly. When tranquillity shall 
have been reestablished in Manchuria and China shall have become 
herself capable of affording full protection to the lives and property 
of foreigners, Japan will withdraw her railway guards simultane- 
ously with Russia. 

Article III. 

The Imperial Japanese Government, immediately upon the with- 
drawal of their troops from any regions in Manchuria, shall notify 
the Imperial Chinese Government of the regions thus evacuated, 
and even within the period stipulated for the withdrawal of troops 
in the Additional Articles of the Treaty of Peace between Japan 
and Russia, the Chinese Government may send nfecessary troops to 
the evacuated regions of which they have been already notified as 



APPENDIX 545 

above mentioned, for the purpose of maintaining order and tran- 
quillity in those regions. If, in the regions from which Japanese 
troops have not yet been vi^ithdrawn, any villages are disturbed or 
damaged by native bandits, the Chinese local authorities may also 
dispatch a suitable military force for the purpose of capturing or 
dispersing those bandits. Such troops, however, shall not proceed 
within twenty Chinese li from the boundary of the territory where 
Japanese troops are stationed. 

Article IV. 

The Imperial Government of Japan engage that Chinese public 
and private property in Manchuria, which they have occupied or 
expropriated on account of military necessity, shall be restored at 
the time the Japanese troops are withdrawn from Manchuria and 
that such property as is no longer required for military purposes 
shall be restored even before such withdrawal. 

Article V. 

The Imperial Chinese Government engage to take all necessary 
measures to protect fully and completely the grounds in Man- 
churia in which the tombs and monuments of the Japanese officers 
and soldiers who were killed in war are located. 

Article VI. 

The Imperial Chinese Government agree that Japan has the 
right to maintain and work the military railway line constructed 
between Antung and Moukden and to improve the said line so as to 
make it fit for the conveyance of commercial and industrial goods 
of all nations. The term for which such right is conceded is fifteen 
years from the date of the completion of the improvements above 
provided for. The work of such improvements is to be completed 
within two years, exclusive of a period of twelve months during 
which it will have to be delayed owing to the necessity of using the 
existing line for the withdrawal of troops. The term of the con- 
cession above mentioned is therefore to expire in the 49th year of 
Kuang Hsii. At the expiration of that term, the said railway shall 
be sold to China at a price to be determined by appraisement of all 



546 APPENDIX 

its properties by a foreign expert who will be selected by both 
parties. The conveyance by the railway of the troops and muni- 
tions of war of the Chinese Government prior to such sale shall 
be dealt with in accordance with the regulations of the Eastern 
Chinese Railway. Regarding the manner in which the improve- 
ments of the railway are to be effected, it is agreed that the person 
undertaking the work on behalf of Japan shall consult with the 
Commissioner dispatched for the purpose by China. The Chinese 
Government will also appoint a Commissioner to look after the 
business relating to the railway as is provided in the Agreement 
relating to the Eastern Chinese Railway. It is further agreed 
that detailed regulations shall be concluded regarding the tariffs 
for the carriage by the railway of the public and private goods of 
China. 

Article VII. 

The Governments of Japan and China, with a view to promote 
and facilitate intercourse and traffic, will conclude, as soon as pos- 
sible, a separate convention for the regulation of connecting services 
between the railway lines in South Manchuria and all the other 
railway lines in China. 

Article VIII. 

The Imperial Chinese Government engage that all materials re- 
quired for the railways in South Manchuria shall be exempt from 
all duties, taxes and likin. 

Article IX. 

The methods of laying out the Japanese Settlement at Yingkou 
in the Province of Shingking, which has already been opened to 
trade, and at Antung and Moukden in the same Province, which 
are still unopen although stipulated to be opened, shall be separately 
arranged and determined by officials of Japan and China. 

Article X. 

The Imperial Chinese Government agree that a joint-stock com- 
pany of forestry composed of Japanese and Chinese capitalists shall 



APPENDIX 547 

be organized for the exploitation of the forests in the regions on the 
right bank of the River Yalu and that a detailed agreement shall be 
concluded in which the area and term of the concession as well as 
the organization of the company and all regulations concerning the 
joint work of exploitation shall be provided for. The Japanese 
and Chinese shareholders shall share equally in the profits of the 
undertaking. 

Article XL 

The Governments of Japan and China engage that in all that re- 
lates to frontier trade between Manchuria and Corea most favoured 
nation treatment shall be reciprocally extended. 

Article XII. 

The Governments of Japan and China engage that in all matters 
dealt with in the Treaty signed this day or in the present Agree- 
ment the most favourable treatment shall be reciprocally extended. 
The present Agreement shall take efEect from the date of signa- 
ture. When the Treaty signed this day is ratified, this Agreement 
shall also be considered as approved. 

In witness whereof, the Undersigned, duly authorized by their 
respective Governments, have signed the present Agreement in 
duplicate in the Japanese and Chinese languages and have thereto 
affixed their seals. 

Done at Peking, this 22nd day of the 12th month of the 38th 
year of Meiji, corresponding to the 26th day of the nth moon of 
the 31st year of Kuang Hsii. 

(Signed) Baron Komura Jutaro, [l.s.] 

Jusammi, Grand Cordon of the Imperial Order of the 
Rising Sun, Minister for Foreign Affairs and Special Am- 
bassador of His Majesty the Emperor of Japan. 
(Signed) UcHiDA Yasuya, [l.s.] 

Jushiij Second Class of the Imperial Order of the Rising 
Sun, Envoy Extraordinary and Minister Plenipotentiary 
of His Majesty the Emperor of Japan. 



548 APPENDIX 

(Signed) Prince Ching, [l.s.] 

Presiding Minister for Foreign Affairs, Councillor of 
State and Plenipotentiary of His Majesty the Emperor 
of China. 

(Signed) Chu Hung-chi, [l.s.] 

Minister for Foreign Affairs, Councillor of State and 
Plenipotentiary of His Majesty the Emperor of China. 

(Signed) Yuan Shih-Kai, [l.s.] 

Viceroy of the Province of Chihli, Junior Guardian of 
the Heir- Apparent, Minister Superintendent of Trade 
for the Northern Ports and Plenipotentiary of His Maj- 
esty the Emperor of China. 



APPENDIX D. 

SUMMARY OF SECRET PROIOCOLS TO PEKING 
TREATY OF DECEMBER 22D, 1905. 

The following was communicated by the Japanese Minister for 
Foreign Affairs to Mr. Wilson, Charge dAfEaires of the United 
States at Tokyo, and by him transmitted to the Department of 
State under date February 16, 1906, as a summary of certain pro- 
tocols to the Peking Agreement signed by the plenipotentiaries of 
Japan and China: 

Whereas the protocols of the Conference recently held between 
the Plenipotentiaries of Japan and China with regard to Manchuria 
are to be kept strictly secret in deference to the desire of the 
Chinese Government, only such portions of those Protocols as pos- 
sess the character of executory agreements are given in the 
following summary : 

I. The railway between Changchun and Kirin will be con- 
structed by China with capital to be raised by herself. She, how- 
ever, agrees to borrow from Japan the insufficient amount of 
capital, which amount being about one-half of the total sum re- 
quired. The contract concerning the loan shall, in due time, be 
concluded, following, mutatis mutandis, the loan contract entered 
into between the board of the Imperial Railways of North China 



APPENDIX 549 

and the Anglo-Chinese Syndicate. The term of the loan shall be 
twenty-five years, redeemable in yearly installments. 

2. The military railway constructed by Japan between Mouk- 
den and Hsinmintun shall be sold to China at a price to be fairly 
determined in consultation by Commissioners appointed for the pur- 
pose by the two Governments. China engages to reconstruct the 
line, making it her own railway, and to borrow from a Japanese 
corporation or corporations one-half of the capital required for the 
portion of the line east of Liao-ho for a term of eighteen years re- 
payable in yearly installments, and a contract shall be concluded, 
for the purpose following, mutatis mutandisj the loan contract en- 
tered into between the Board of the Imperial Railways of North 
China and the Anglo-Chinese Syndicate. 

All the other military railways in different localities shall be re- 
moved with the evacuation of the regions. 

3. The Chinese Government engage, for the purpose of protect- 
ing the interests of the South Manchurian Railway, not to con- 
struct, prior to the recovery by them of the said railway, any main 
line in the neighborhood of and parallel to that railway, or any 
branch line which might be prejudicial to the interest of the above- 
mentioned railway. 

4. China declares that she will adopt sufficient measures for 
securing Russia's faithful observance of the Russo-Chinese treaties 
with regard to the railways which Russia continues to possess in the 
northern part of Manchuria, and that it is her intention, in case 
Russia acts in contravention of such treaty stipulations, to approach 
her strongly with a view to have such action fully rectified. 

5. When in the future, negotiations are to be opened between 
Japan and Russia for regulation of the connecting railway services 
(Article VIII of the Treaty of Peace between Japan and Russia), 
Japan shall give China previous notice. China shall communicate 
to Russia her desire to take part in the negotiations through com- 
missioners to be despatched by her on the occasion, and Russia 
consenting shall participate in such negotiations. 

6. With regard to the mines in the Province of Feng-tien, ap- 
pertaining to the railway, whether already worked or not, fair and 
detailed arrangements shall be agreed upon for mutual observance. 



550 APPENDIX 

7. The affairs relating to the connecting services as well as those 
of common concern in respect of the telegraph lines in the Province 
of Feng-tien and the cables between Port Arthur and Yen-tai shall 
be arranged from time to time as necessity may arise in consultation 
between the two countries. 

8. The regulations respecting the places to be opened in Man- 
churia, shall be made by China herself, but the Japanese Minister 
at Peking must be previously consulted regarding the matter. 

9. If no objection be offered on the part of Russia respecting to 
the navigation of the Sungari (by Japanese vessels), China shall 
consent to such navigation after negotiations. 

10. The Chinese Plenipotentiaries declare that immediately 
after the withdrawal of the Japanese and Russian troops from 
Manchuria, China will proceed to take, in virtue of her sovereign 
right, full administrative measures to guarantee peace in that region 
and endeavor, by the same right, to promote good and remove evil 
as well as steadily to restore order, so that the residents of that 
region, natives and foreigners, may equally enjoy the security of life 
and occupation under the perfect protection of the Chinese Govern- 
ment. As to the means of restoring order, the Chinese Govern- 
ment are to take by themselves all adequate measures. 

11. While relations of intimate friendship subsisted as at the 
present time between China and Japan, Japan and Russia had un- 
fortunately engaged in war and fought in the territory of China. 
But peace has now been reestablished and hostilities in Manchuria 
have ceased. And while it is undeniable that Japanese troops, be- 
fore their withdrawal, have the power of exercising the rights ac- 
cruing from military occupation, the Chinese Government declare 
that certain Japanese subjects in Manchuria have recently been ob- 
served to sometimes interfere with the local Chinese administration 
and to inflict damage to public and private property of China. 

The Japanese Plenipotentiaries, considering that, should such in- 
terference and infliction of damage have been carried beyond mili- 
tary necessity, they are not proper acts, declare that they will 
Communicate the purport of the above declaration of the Chinese 
Government to the Government of Japan, so that proper steps may 
be taken for controlling Japanese subjects in the Province of Feng- 



APPENDIX 551 

tien and promote the friendly relations between the two nations, 
and also for preventing them in future, from interfering with the 
Chinese administration or inflicting damage to public or private 
property without military necessity. 

12. In regard to any public or private property of China which 
may have been purposely destroyed or used by Japanese subjects 
without any military necessity, the Governments of the two 
countries shall respectively make investigations and cause fair rep- 
aration to be made. 

13. When the Chinese local authorities intend to despatch 
troops for the purpose of subduing native bandits in the regions not 
yet completely evacuated by Japanese troops, they shall not fail to 
previously consult with the Commander of the Japanese troops 
stationed in those regions so that all misunderstandings may be 
avoided. 

14. The Japanese Plenipotentiaries declare that the Railway 
Guards stationed between Chang-chun and the boundary line of 
the leased territory of Port Arthur and Talien [Dalny], shall not 
be allowed, before their withdrawal, to unreasonably interfere 
with the local administration of China or to proceed without per- 
mission beyond the limits of the railway. 

15. Chinese local authorities, who are to reside at Inkou, shall 
be allowed, even before the withdrawal of the Japanese troops, to 
proceed to that place and transact their oflicial business. The date 
of their departure is to be determined, as soon as possible after the 
definite conclusion of this Treaty, by the Japanese Minister to 
China in consultation with the Waiwupu. As there is still in that 
place a considerable number of Japanese troops, quarantine regula- 
tions as well as regulations for the prevenion of contagious diseases 
shall be established by the authorities of the two countries in con- 
sultation with each other so that epidemics may be avoided. 

16. The revenue of the Maritime Customs at Yin Kou [New- 
chwang] shall be deposited with the Yokohama Specie Bank and 
delivered to the Chinese local authorities at the time of evacu- 
ation. As to the revenue of the native Customs at that place and 
the taxes and imposts at all other places, which are to be appro- 
priated for local expenditures, a statement of receipts and expendi- 



552 APPENDIX 

tures shall be delivered to the Chinese local authorities at the 
time of evacuation. 

Note. 

In regard to the foregoing, see No. i-B ( ?), Information Series, 
Far East, being a memorandum of a conversation of January 28, 
1908, in the course of which Tang Shao-yi, Governor of the Prov- 
ince of Fengtien, vi'ho signed the Peking Agreement, categorically 
denied the existence of any clause debarring China from paralleling 
the South Manchurian Railroad. Tang Shao-yi further gave dis- 
tinct assurance that there was no secret agreement between Japan 
and China and that all the Legations had been apprised of this fact 
upon the conclusion of the Komura negotiations. Tang-shao-yi in- 
timated that an agreement that China should not parallel the 
Japanese railroad had been sought and discussed, but not made, and 
implied that such discussion appeared in the signed minutes of the 
conference, the inference being that there was absolutely no agree- 
ment but simply evidence of a discussion of this subject. 



APPENDIX E. 
REORGANIZATION OF THE MANCHURIAN PROV- 
INCES. 

Imperial Edict of April 20, l^oy. 
[Translation.] 

The government of the Three Eastern Provinces (Manchuria) 
has become antiquated, and the condition of the people is one of 
poverty. It becomes urgently necessary therefore to conscientiously 
undertake a thorough reorganization of these provinces to get rid 
of long-standing abuses, and to define the responsibilities of officials. 

The Tartar Generalship of Shengking is hereby changed to the 
Viceroyship of the Three Manchurian Provinces, and to this post 
are added the functions of the Tartar Generals of these three prov- 
inces. The incumbent of the post will have an office in each of the 
three provinces and reside in each of them in tyrn. 



APPENDIX 553 

The post of Governor is created in each of these three provinces ; 
Feng-tien (Moukden), Kirin, and Hei-lung-chiang, to assist in 
the administration of the government. 

Hsu Shih-ch'ang is hereby appointed to the post of Viceroy of the 
Three Manchurian Provinces with the added powers of Tartar 
General of the three provinces, and is also made a High Commis- 
sioner of the Imperial Government. 

Tong Shao-yi is appointed Governor of Feng-tien (i. e. Mouk- 
den), Chu Chia-pao Acting Governor of Kirin, and Tuan Chih- 
kuei is given the rank of a Provincial Treasurer, and made Acting 
Governor of Hei-lung-chiang (Amur). 

The said Viceroys and Governors, having thus been placed in 
charge of these important provinces, ought to exercise great care in 
all their planning and in the exercise of their functions, disregard- 
ing the importunities of friends and unmindful of enmities and 
hardships, giving thorough consideration to all their duties and 
taking them up in orderly succession, so that thus they may fulfill 
the trust confided to them. As to the additional offices which may 
need to be created, let the aforesaid Viceroy and Governors take 
the matter into consideration and report to US. 



APPENDIX F. 

ANGLO- JAPANESE AGREEMENT. 

Signed at London, August 12, 1905. 

The following "Despatch to His Majesty's Ambassador at St. 
Petersburgh, forwarding a copy of the Agreement between the 
United Kingdom and Japan, signed at London, August 12, 1905," 
was issued yesterday as a Parliamentary paper [Cd.2690] : — 

THE MARQUESS OF LANSDOWNE TO SIR C. HARDINGE. 

Foreign Office, September 6, ipo^. 
Sir, — I inclose, for your Excellency's information, a copy of a 
new Agreement concluded between His Majesty's Government and 



554 APPENDIX 

that of Japan in substitution for that of the 30th January, 1902. 
You will take an early opportunity of communicating the new 
Agreement to the Russian Government. 

It was signed on the 12th August, and you will explain that it 
would have been immediately made public but for the fact that 
negotiations had at that time already commenced between Russia 
and Japan, and that the publication of such a document whilst those 
negotiations were still in progress would obviously have been im- 
proper and inopportune. 

The Russian Government will, I trust, recognize that the new 
Agreement is an international instrument to which no exception 
can be taken by any of the Powers interested in the affairs of the 
Far East. You should call special attention to the objects men- 
tioned in the preamble as those by which the policy of the Con- 
tracting Parties is inspired. His Majesty's Government believe 
that they may count upon the good will and support of all the 
Powers in endeavouring to maintain peace in Eastern Asia, and 
in seeking to uphold the integrity and independence of the Chinese 
Empire and the principle of equal opportunities for the commerce 
and industry of all nations in that country. 

On the other hand, the special interests of the Contracting 
Parties are of n kind upon which they are fully entitled to insist, 
and the announcement that those interests must be safeguarded is 
one which can create no surprise, and need give rise to no mis- 
givings. 

I call your special attention to the wording of Article II., which 
lays down distinctly that it is only in the case of an unprovoked 
attack made on one of the Contracting Parties by another Power or 
Powers, and when that Party is defending its territorial rights and 
special interests from aggressive action, that the other Party is 
bound to come to its assistance. 

Article III, dealing with the question of Korea, is deserving of 
especial attention. It recognizes in the clearest terms the para- 
mount position which Japan at this moment occupies and must 
henceforth occupy in Korea, and her right to take any measures 
which she may find necessary for the protection of her political, 
military, and economic interests in that country. It is, however, 



APPENDIX 555 

expressly provided that such measures must not be contrary to the 
principle of equal opportunities for the commerce and industry of 
other nations. The new Treaty no doubt differs at this point con- 
spicuously from that of 1902. It has, however, become evident 
that Korea, owing to its close proximity to the Japanese Empire 
and its inability to stand alone, must fall under the control and 
tutelage of Japan. 

His Majesty's Government observe with satisfaction that this 
point was readily conceded by Russia in the Treaty of Peace re- 
cently concluded with Japan, and they have every reason to believe 
that similar views are held by other Powers with regard to the 
relations which should subsist between Japan and Korea. 

His Majesty's Government venture to anticipate that the alliance 
thus concluded, designed as it is with objects which are purely 
peaceful and for the protection of rights and interests the validity 
of which cannot be contested, will be regarded with approval by the 
Government to which you are accredited. They are justified in 
believing that its conclusion may not have been without effect in 
facilitating the settlement by which the war has been so happily 
brought to an end, and they earnestly trust that it may, for many 
years to come, be instrumental in securing the peace of the world 
in those regions which come within its scope. 

I am, &c., (Signed) Lansdowne. 

Inclosure. 

agreement between the united kingdom and japan, signed 

at london^ august 12, i905. 

Preamble. 

The Governments of Great Britain and Japan, being desirous of 
replacing the Agreement concluded between them on the 30th 
January, 1 902, by fresh stipulations, have agreed upon the follow- 
ing Articles, which have for their object : — 

(a) The consolidation and maintenance of the general peace in 
the regions of Eastern Asia and of India; 

{b) The preservation of the common interest of all Powers in 



5S6 APPENDIX 

China by insuring the independence and integrity of the Chinese 
Empire and the principle of equal opportunities for the commerce 
and industry of all nations in China; 

(c) The maintenance of the territorial rights of the High Con- 
tracting Parties in the regions of Eastern Asia and of India, and 
the defence of their special interests in the said regions: — 

Article I. 

It is agreed that whenever, in the opinion of either Great Britain 
or Japan, any of the rights and interests referred to in the preamble 
of this Agreement are in jeopardy, the two Governments will com- 
municate with one another fully and frankly, and will consider in 
common the measures which should be taken to safeguard those 
menaced rights or interests. 

Article II. 

If by reason of unprovoked attack or aggressive action, wherever 
arising, on the part of any other Power or Powers either Contract- 
ing Party should be involved in war in defence of its territorial 
rights or special interests mentioned in the preamble of this Agree- 
ment, the other Contracting Party will at once come to the assistance 
of its ally, and will conduct the war in common, and make peace in 
mutual agreement with it. 

Article III. 

Japan possessing paramount political, military, and economic in- 
terests in Korea, Great Britain recognizes the right of Japan to take 
such measures of guidance, control, and protection in Korea as she 
may deem proper and necessary to safeguard and advance those 
interests, provided always that such measures are not contrary to 
the principle of equal opportunities for the commerce and industry 
of all nations. 

Article IV. 

Great Britain having a special interest in all that concerns the 
security of the Indian frontier, Japan recognizes her right to 



APPENDIX 557 

take such measures in the proximity of that frontier as she may 
find necessary for safeguarding her Indian possessions. 

Article V. 

The High Contracting Parties agree that neither of them will, 
without consulting the other, enter into separate arrangements with 
another Power to the prejudice of the objects described in the pre- 
amble of this Agreement. 

Article VI. 

As regards the present war between Japan and Russia, Great 
Britain will continue to maintain strict neutrality unless some other 
Power or Powers should join in hostilities against Japan, in which 
case Great Britain will come to the assistance of Japan, and will 
conduct the war in common, and make peace in mutual agreement 
with Japan. 

Article VI I. 

The conditions under which armed assistance shall be afforded 
by either Power to the other in the circumstances mentioned in the 
present Agreement, and the means by which such assistance is to be 
made available, will be arranged by the Naval and Military author- 
ities of the Contracting Parties, who will from time to time consult 
one another fully and freely upon all questions of mutual interest. 

Article VIII. 

The present Agreement shall, subject to the provisions of Article 
VI., come into effect immediately after the date of its signature, and 
remain in force for ten years from that date. 

In case neither of the High Contracting Parties should have noti- 
fied twelve months before the expiration of the said ten years the 
intention of terminating it, it shall remain binding until the expi- 
ration of one year from the day on which either of the High Con- 
tracting Parties shall have denounced it. But if, when the date 
fixed for its expiration arrives, either ally is actually engaged in 
war, the alliance shall, ipso facto, continue until peace is concluded. 

In faith whereof the Undersigned, duly authorized by their re- 



558 APPENDIX 

spective Governments, have signed this Agreement and have affixed 
thereto their Seals. 

Done in duplicate at London, the I2th day of August, 1905. 
(L.S.) Lansdowne, 

His Britannic Majesty's Principal Secretary 

of State for Foreign Affairs. 

(L.S.) Tadasu Hayashi, 

Envoy Extraordinary and Minister Plenipotentiary of His 

Majesty the Emperor of Japan at the Court of St. James. 



APPENDIX G. 
FRANCO-JAPANESE ARRANGEMENT. 

Signed at Paris, June 10, 1907. 
arrangement. 

The Government of His Majesty the Emperor of Japan and the 
Government of the French Republic, animated by the desire to 
strengthen the relations of amity existing between them, and to 
remove from those relations all cause of misunderstanding for the 
future, have decided to conclude the following Arrangement : 

" The Governments of Japan and France, being agreed to respect 
the independence and integrity of China, as well as the principle of 
equal treatment in that country for the commerce and subjects or 
citizens of all nations, and having a special interest to have the 
order and pacific state of things preserved especially in the regions 
of the Chinese Empire adjacent to the territories where they have 
the rights of sovereignty, protection or occupation, engage to sup- 
port each other for assuring the peace and security in those regions, 
with a view to maintain the respective situation and the territorial 
rights of the two High Contracting Parties in the Continent of 
Asia." 

In witness whereof, the Undersigned : His Excellency Monsieur 
Kurino, Ambassador Extraordinary and Plenipotentiary of His 
Majesty the Emperor of Japan to the President, of the French Re- 



APPENDIX 559 

public, and His Excellency Monsieur Stephen Pichon, Senator, 
Minister for Foreign Affairs, authorized by their respective Gov- 
ernments, have signed this Arrangement and have affixed thereto 
their seals. 

Done at Paris, the loth of June 1907. 

(L. S.) S. KuRiNO. 

(L. S.) S. Pichon. 

DECLARATION. 

The two Governments of Japan and France, while reserving the 
negotiations for the conclusion of a Convention of Commerce in re- 
gard to the relations between Japan and French Indo-China, agree 
as follows : 

The treatment of the most favoured nation shall be accorded to 
the officers and subjects of Japan in French Indo-China in all 
that concerns their persons and the protection of their property, 
and the same treatment shall be applied to the subjects and 
proteges of French Indo-China in the Empire of Japan, until the 
expiration of the Treaty of Commerce and Navigation signed 
between Japan and France on the 4th of August, 1896. 

Paris, the loth of June, 1907. 

(L. S.) S. KuRiNO. 

(L. S.) S. Pichon. 



APPENDIX H. 

CONVENTION BETWEEN THE UNITED KINGDOM 
AND RUSSIA RELATING TO PERSIA, AF- 
GHANISTAN AND THIBET. 

Signed at St. Petersburg, August 31, 1907. 
Ratifications exchanged at St. Petersburg, September 

23, 1907. 

CONVENTION. 

[Translation.] 

His Majesty the King of the United Kingdom of Great Britain 
and Ireland and of the British Dominions beyond the Seas, Em- 



56o APPENDIX 

peror of India, and His Majesty the Emperor of All the Russias, 
animated by the sincere desire to settle by mutual agreement dif- 
ferent questions concerning the interests of their States on the 
Continent of Asia, have determined to conclude Agreements des- 
tined to prevent all cause of misunderstanding betw^een Great 
Britain and Russia in regard to the questions referred to, and 
have nominated for this purpose their respective Plenipotentiaries, 
to-wit : 

His Majesty the King of the United Kingdom of Great Britain 
and Ireland and of the British Dominions beyond the Seas, Em- 
peror of India, the Right Honourable Sir Arthur Nicolson, His 
Majesty's Ambassador Extraordinary and Plenipotentiary to His 
Majesty the Emperor of All the Russias; 

His Majesty the Emperor of All the Russias, the Master of 
his Court Alexander Isw^olsky, Minister for Foreign Affairs; 

Who, having communicated to each other their full powers, 
found in good and due form, have agreed on the f ollow^ing : — 

AGREEMENT CONCERNING PERSIA. 

The Governments of Great Britain and Russia having mutu- 
ally engaged to respect the integrity and independence of Persia, 
and sincerely desiring the preservation of order throughout that 
country and its peaceful development, as well as the permanent 
establishment of equal advantages for the trade and industry of 
all other nations; 

Considering that each of them has, for geographical and eco- 
nomic reasons, a special interest in the maintenance of peace and 
order in certain provinces of Persia adjoining, or in the neighbor- 
hood of, the Russian frontier on the one hand, and the frontiers 
of Afghanistan and Baluchistan on the other hand; and being 
desirous of avoiding all cause of conflict between their respective 
interests in the above-mentioned provinces of Persia; 

Have agreed on the following terms : — 

I. 

Great Britain engages not to seek for herself, and not to sup- 
port in favour of British subjects, or in favour pf the subjects of 



APPENDIX 561 

third Powers, any Concessions of a political or commercial nature 
— such as Concessions for railways, banks, telegraphs, roads, 
transport, insurance, etc. — beyond a line starting from Kasr-i- 
Shirin, passing through Isfahan, Yezd, Kakhk, and ending at a 
point on the Persian frontier at the intersection of the Russian and 
Afghan frontiers, and not to oppose, directly or indirectly, de- 
mands for similar Concessions in this region which are supported 
by the Russian Government. It is understood that the above- 
mentioned places are included in the region in which Great 
Britain engages not to seek the Concessions referred to. 

II. 

Russia, on her part, engages not to seek for herself and not to 
support, in favour of Russian subjects, or in favour of the subjects 
of third Powers, any Concessions of a political or commercial 
nature — such as Concessions for railways, banks, telegraphs, 
roads, transport, insurance, etc. — beyond a line going from the 
Afghan frontier by way of Gazik, Birjand, Kerman, and ending 
at Bunder Abbas, and not to oppose, directly or indirectly, de- 
mands for similar Concessions in this region which are supported 
by the British Government. It is understood that the above- 
mentioned places are included in the region in which Russia en- 
gages, not to seek the Concessions referred to. 

III. 

Russia, on her part, engages not to oppose, without previous 
arrangement with Great Britain, the grant of any concessions 
whatever to British subjects in the regions of Persia situated be- 
tween the lines mentioned in Articles I and II. 

Great Britain undertakes a similar engagement as regards the 
grant of Concessions to Russian subjects in the same regions of 
Persia. 

All Concessions existing at present in the regions indicated in 
Articles I and II are maintained. 

IV. 
It is understood that the revenues of all the Persian customs, 



562 APPENDIX 

with the exception of those of Farsistan and of the Persian Gulf, 
revenues guaranteeing the amortization and the interest of the 
loans concluded by the Government of the Shah v^^ith the 
" Banque d'Escompte et des Prets de Perse " up to the date of the 
signature of the present Agreement, shall be devoted to the same 
purpose as in the past. 

It is equally understood that the revenues of the Persian cus- 
toms of Farsistan and of the Persian Gulf, as w^ell as those of 
the fisheries on the Persian shore of the Caspian Sea and those on 
the Posts and Telegraphs, shall be devoted, as in the past, to the 
service of the loans concluded by the Government of the Shah 
veith the Imperial Bank of Persia up to the date of the signature 
of the present Agreement. 

V. 

In the event of irregularities occurring in the amortization or 
the payment of the interest of the Persian loans concluded vi^ith 
the " Banque d'Escompte et des Prets de Perse " and w^ith the 
Imperial Bank of Persia up to the date of the signature of the 
present Agreement, and In the event of the necessity arising for 
Russia to establish control over the sources of revenue guaran- 
teeing the regular service of the loans concluded with the first- 
named bank, and situated in the region mentioned in Article II 
of the present Agreement, or for Great Britain to establish con- 
trol over the sources of revenue guaranteeing the regular service 
of the loans concluded with the second-named bank, and situated in 
the region mentioned in Article I of the present Agreement, the 
British and Russian Governments undertake to enter beforehand 
into a friendly exchange of ideas with a view to determine, in 
agreement with each other, the measures of control In question 
and to avoid all interference which would not be In conformity 
with the principles governing the present Agreement. 

CONVENTION CONCERNING AFGHANISTAN. 

The High Contracting Parties, in order to ensure perfect se- 
curity on their respective frontiers in Central Asia and to main- 



APPENDIX 563 

tain in these regions a solid and lasting peace, have concluded the 
following Convention: — 

Article I. 

His Britannic Majesty's Government declare that they have no 
Intention of changing the political status of Afghanistan. 

His Britannic Majesty's Government further engage to exer- 
cise their influence in Afghanistan only in a pacific sense, and they 
will not themselves take, nor encourage Afghanistan to take, any 
measures threatening Russia. 

The Russian Government, on their part, declare that they rec- 
ognize Afghanistan as outside the sphere of Russian influence, and 
they engage that all their political relations with Afghanistan 
shall be conducted through the intermediary of His Britannic 
Majesty's Government; they further engage not to send any 
Agents into Afghanistan. 

Article 11. 

The Government of His Britannic Majesty having declared in 
the Treaty signed at Kabul on the 21st March, 1905, that they 
recognize the Agreement and the engagements concluded with 
the late Ameer Abdur Rahman, and that they have no intention of 
interfering in the internal government of Afghan territory, Great 
Britain engages neither to annex nor to occupy in contravention 
of that Treaty any portion of Afghanistan or to interfere in the 
internal administration of the country, provided that the Ameer 
fulfils the engagements already contracted by him towards His 
Britannic Majesty's Government under the above-mentioned 
Treaty. 

Article HI. 

The Russian and Afghan authorities, specially designated for 
the purpose on the frontier or in the frontier provinces, may es- 
tablish direct relations with each other for the settlement of 
local questions of a non-political character. 



564 APPENDIX 

Article IV. 

His Britannic Majesty's Government and the Russian Govern- 
ment affirm their adherence to the principle of equality of com- 
mercial opportunity in Afghanistan, and they agree that any fa- 
cilities which may have been, or shall be hereafter, obtained for 
British and British-Indian trade and traders, shall be equally en- 
joyed by Russian trade and traders. Should the progress of trade 
establish the necessity for Commercial Agents, the two Govern- 
ments will agree as to what measures shall be taken, due regard, 
of course, being had to the Ameer's sovereign rights. 

Article V. 

The present arrangements will only come into force when His 
Britannic Majesty's Government shall have notified to the Rus- 
sian Government the consent of the Ameer to the terms stipu- 
lated above. 

AGREEMENT CONCERNING THIBET. 

The Governments of Great Britain and Russia recognizing the 
suzerain rights of China in Thibet, and considering the fact that 
Great Britain, by reason of her geographical position, has a spe- 
cial interest in the maintenance of the status quo in the external 
relations of Thibet, have made the following Agreement: — 

Article I. 

The two High Contracting Parties engage to respect the terri- 
torial integrity of Thibet and to abstain from all interference in 
its internal administration. 

Article II. 

In conformity with the admitted principle of the suzerainty of 
China over Thibet, Great Britain and Russia engage not to en- 
ter into negotiations with Thibet except through the intermedi- 
ary of the Chinese Government. This engagement does not ex- 
clude the direct relations between British Commercial Agents and 
the Thibetan authorities provided for in Artjcle V of the Con- 



APPENDIX 565 

vention between Great Britain and Thibet of the 7th Septem- 
ber, 1904, and confirmed by the Convention between Great Brit- 
ain and China of the 27th April, 1906; nor does it modify the 
engagements entered into by Great Britain and China in Article 
I of the said Convention of 1 906. 

It is clearly understood that Buddhists, subjects of Great Brit- 
ain or of Russia, may enter into direct relations on strictly re- 
ligious matters with the Dalai Lama and the other representatives 
of Buddhism in Thibet; the Governments of Great Britain and 
Russia engage, so far as they are concerned, not to allow those 
relations to infringe the stipulations of the present Agreement. 

Article III. 

The British and Russian Governments respectively engage not 
to send Representatives to Lhassa. 

Article IV. 

The two High Contracting Parties engage neither to seek nor 
to obtain, whether for themselves or their subjects, any Conces- 
sions for railways, roads, telegraphs, and mines, or other rights 
in Thibet. 

Article V. 

The two Governments agree that no part of the revenues of 
Thibet, whether in kind or in cash, shall be pledged or assigned 
to Great Britain or Russia or to any of their subjects. 

ANNEX TO THE AGREEMENT BETWEEN GREAT BRITAIN AND RUS- 
SIA concerning THIBET. 

Great Britain reaffirms the Declaration, signed by his Excel- 
lency the Viceroy and Governor-General of India and appended 
to the ratification of the Convention of the 7th September, 1904, 
to the effect that the occupation of the Chumbi Valley by British 
forces shall cease after the payment of three annual installments 
of the indemnity of 2,500,000 rupees, provided that the trade 
marts mentioned in Article II of that Convention have been ef- 



S66 APPENDIX 

fectively opened for three years, and that in the meantime the 
Thibetan authorities have faithfully complied in all respects with 
the terms of the said Convention of 1904. It is clearly under- 
stood that if the occupation of the Chumbi Valley by the British 
forces has, for any reason, not been terminated at the time antici- 
pated in the above Declaration, the British and R*ussian Govern- 
ments will enter upon a friendly exchange of views on this sub- 
ject. 

The present Convention shall be ratified, and the ratifications 
exchanged at St. Petersburgh as soon as possible. 

In witness whereof the respective Plenipotentiaries have signed 
the present Convention and affixed thereto their seals. 

Done in duplicate at St. Petersburgh, the i8th (31st) August, 
1907. 

(L. S.) A. NicoLSON. 

(L. S.) ISWOLSKY. 



APPENDIX I. 



CONVENTION PROVIDING FOR CONTROL OF KO- 
REAN FOREIGN RELATIONS BY JAPAN. 

Signed November 17, 1905. 

The Governments of Japan and Korea, desiring to strengthen 
the principle of solidarity which unites the two Empires, have 
with that object in view agreed upon and concluded the following 
stipulations to serve until the moment arrives when it is recog- 
nized that Korea has attained national strength: — 

Article I. 

The Government of Japan, through the Department of For- 
eign Affairs at Tokyo, will hereafter have control and direction of 
the external relations and affairs of Korea, and the diplomatic 
and consular representatives of Japan will have the charge of the 
subjects and interests of Korea in foreign countries. 



APPENDIX 567 

Article II. 
The Government of Japan undertake to see to the execution 
of the treaties actually existing between Korea and the other 
Powers, and the Government of Korea engage not to conclude 
hereafter any act or engagement having an international character, 
except through the medium of the Government of Japan. 

Article III. 

The Government of Japan shall be represented at the Court 
of His Majesty the Emperor of Korea by a Resident General, 
who shall reside at Seoul, primarily for the purpose of taking 
charge of and directing matters relating to diplomatic affairs. 
He shall have the right of private and personal audience of His 
Majesty the Emperor of Korea. The Japanese Government shall 
also have the right to station Residents at the several open ports 
and such other places in Korea as they may deem necessary. Such 
Residents shall, under the direction of the Resident General, ex- 
ercise the powers and functions hitherto appertaining to Japanese 
Consuls in Korea and shall perform such duties as may be nec- 
essary in order to carry into full effect the provisions of this 
agreement. 

Article IV. 

The stipulations of all treaties and agreements existing between 
Japan and Korea not inconsistent with the provisions of this 
Agreement shall continue in force. 

Article V. 
The Government of Japan undertake to maintain the welfare 
and dignity of the Imperial House of Korea. 

In faith whereof, the Undersigned duly authorized by their 
Governments have signed this Agreement and affixed their seals. 
Signed Hayashi Gonsuke, [seal] 

Envoy Extraordinary and Minister Plenipotentiary. 
The lyth day of the nth month of the ^8th year of Meiji. 
Signed. Pak Che Soon, [seal] 

Minister for Foreign Affairs. 
The i/th day of the nth month of the pth year of Kwang-Mu. 



568 APPENDIX 

APPENDIX J. 

CONVENTION CONCERNING THE ADMINISTRA- 
TION OF KOREA. 

Signed at Seoul, July 24, 1907. 

(Official English text issued from Tokyo Foreign Office.) 

The Governments of Japan and of Korea, desiring to speedily 
promote the wealth and strength of Korea and with the object 
of promoting the prosperity of the Korean nation, have agreed to 
the following terms: 

1. In all matters relating to the reform of the Korean Admin- 
istration the Korean Government shall receive instruction and 
guidance from the Resident-General. 

2. In all matters relating to the enactment of laws and ordi- 
nances and in all important matters of administration, the Ko- 
rean Government must obtain the preliminary approval of the 
Resident-General. 

3. There shall be clear differentiation of the Korean Executive 
and the Korean Judiciary. 

4. In all appointments and removals of high officials the Ko- 
rean Government must obtain the consent of the Resident-General. 

5. The Korean Government shall appoint to be officials of Ko- 
rea any Japanese subjects recommended by the Resident-General. 

6. The Korean Government shall not appoint any foreigners 
to be officials of Korea without consulting the Resident-General. 

7. The First Article of the Agreement signed on August 22nd, 
1904, shall be rescinded. 

In witness of the above the undersigned Plenipotentiaries, duly 
accredited by their respective Governments, have signed the pres- 
ent Convention : — 

Done at Seoul, the 25th day of the 7th month of the 40th year 
of Meiji, corresponding to the 24th day of the 7th month of the 
nth year of Kwangmu. (Signed.) 

Ito Hirobumi, Marquis ; Yi Wan Yong, 

Resident-General. Prime Minister of Korea. 



APPENDIX 569 

Note. — The convention was actually signed at i.o A. M. on 
Thursday 25th July, 1907, at the Residency General at Seoul. 
The Japanese date, as given in the text is correct, the Korean 
incorrect; some other versions of this convention give the date of 
signature as the 24th. 



APPENDIX K. 

Agreement between the Chinese Government and the Russo- 
Chinese Bank for the construction and management of the Chi- 
nese Eastern Railway. 

Imperial sanction received by the Chinese Envoy to 
Russia, Hsu, dated 29th August, 1896. Agreement 
signed 8th September, 1896. 

(Translation from Chinese text.) 

1. China and Russia establish a Company, to be called the 
Chinese Eastern Railway Company, to construct and manage this 
railway. The seal to be used by the Company will be issued 
by the Chinese Government. The regulations of the Company 
will be in conformity with those of Russian railway companies. 
Shares may only be bought by Chinese and Russians. The Di- 
rector of the Company will be appointed by China, His remu- 
neration will be provided by the Company. He may live in Pe- 
king. His duty will be to supervise the task delegated to the 
Company by China, and to ascertain whether its obligations are 
faithfully performed. All business between the Company and 
the Chinese Government or any Chinese officials, either in Peking 
or the provinces, will also be managed by the Director. The 
Director will also investigate from time to time the accounts of 
the Company with the Chinese Government. An agent must be 
stationed at Peking for convenience of consultation. 

2. For the purpose of surveying the course of the railway, the 
Chinese Director will depute an officer to act in conjunction with 
the Company's engineer and the local officials along the line of 
route, who will arrange matters satisfactorily. Measures must 



^ 



570 APPENDIX 

be taken to pass round all houses, graves, villages and towns in 
the course of the railway. 

3. Within twelve months of the issue of an Imperial Edict 
sanctioning this agreement the Company must have commenced 
work on the railway; and within six years from the date of the 
completion of the survey for the line and the handing over to the 
Company of the necessary land the whole line must be completed. 
The gauge of the line must be that of the Russian railway, i. e. 
5 Russian feet, equivalent to 42 1-3 Chinese inches. 

4. The Chinese Government will order all local officials con- 
cerned to do their utmost to assist the Company in regard to all 
material required for the construction of the railway, in engag- 
ing laborers and boats, carts, men, and horses for transport pur- 
poses, and in the purchase of grain and fodder. All these must 
be paid for by the Company at market rates. The Chinese Gov- 
ernment will also afford facilities for transport. 

5. The Chinese Government will take measures for the pro- 
tection of the line and of the men employed thereon. The staff, 
Chinese and foreign, necessary for the line will be engaged as re- 
quired by the Company. All crimes and lawsuits arising on the 
land of the company will be dealt with by the local officials in 
accordance with treaty. 

6. As regards the land required by the Company for construct- 
ing, managing, and protecting the line and adjacent land, for 
procuring sand, earth, stones, and lime, if the land be Govern- 
ment land it will be given the Company without payment. If 
privately owned, the Company will provide funds for payment to 
the proprietors at market rates, either in one payment or as yearly 
rent. All the Company's land will be exempted from land tax. 
As soon as the land comes under the management of the Company 
they may erect thereon any buildings and carry on all kinds of 
work, and they may establish a telegraph line thereon worked by 
the Company for the Company's use. With the exception of 
mines, for which special arrangements must be made, all receipts 
of the Company for transport of passengers and freight, tele- 
grams, etc., will be exempt from all taxation. 



APPENDIX 571 

7. All materials required by the Company for the construction 
and repair of the line will be exempt from taxation. 

8. All Russian troops, naval or military, and munitions of 
war, moved by the Russian Government by this railway, must be 
conveyed by the Company directly across the border. Apart from 
slight detentions en route, incidental to transfers, no other delays 
will be permitted for any cause. 

9. Any foreign passengers by this line who may proceed into the 
interior away from the railway must be provided with Chinese pass- 
ports authorizing them to proceed. Any person unprovided with 
such passports must be forbidden by the Company to proceed into 
the interior. 

10. All goods and baggage coming from Russian territory, and 
again entering Russian territory by this line, will be exempt from 
taxation, but such goods and baggage, with the exception of per- 
sonal luggage of passengers, must be carried by the Company in 
special vans, and sealed by the customs officers on entering Chi- 
nese territory, and on leaving Chinese territory they must be ex- 
amined by the customs officers to ascertain that the seals are in- 
tact, in which case they will be allowed to pass. If it be found 
that the seals have been opened en route the goods will be con- 
fiscated. 

As to goods conveyed by this line from Russia to China or from 
China to Russia, they will pay duty according to the treaty tariff, 
i. e. an import or export duty, as the case may be, but subject to 
a reduction of 1-3 of the tariff rate. If such goods be conveyed 
to the interior they must pay transit duty in addition, i. e. half 
the amount of the duty already paid. Transit duty being paid, 
they are not to be taxed again on passing customs stations or likin 
barriers. But if transit duty be not paid they must pay duty at 
stations and likin barriers. China must establish customs sta- 
tions at the two points where the line crosses the frontier. 

11. Fares for passengers, freight for goods, and charges for 
loading and unloading will be fixed by the Company. Chinese 
Government despatches and letters must be carried by the Com- 
pany free of cost. Chinese troops and munitions of war will be 
carried at half rates. 



572 APPENDIX 

12. From the day of completion of the railway and the com- 
mencement of traffic, for a period of eighty years, all profit made 
by the line shall belong to the Company solely. Any loss must 
likewise be borne by it; the Chinese Government cannot be re- 
sponsible. After eighty years the line and all its property are to 
revert to the Chinese Government without payment. 

Thirty-six years after commencement of traffic China may take 
over the line on payment of the following and all capital and all 
moneys owed on account of the line and interest. As to profits 
made by the Company, should there be any not distributed to 
shareholders, these must be taken to be capital returned and be 
deducted from the price paid for the line. China must actually 
pay over the amount of purchase to Russia before receiving pos- 
session of the line. 

On the day the line Is completed and traffic commenced the 
Company will pay the Chinese Government five million treasury 
taels. 



APPENDIX L. 
LAW CONCERNING MIXED RESIDENCE IN JAPAN. 

We, by the advice of our Privy Council, hereby give our sanc- 
tion to matters relating to the residence and occupation, etc., of 
foreigners who either by virtue of Treaty or of custom have no 
freedom of residence and order the same to be promulgated. 
(Imperial Seal and Sign-Manual.) 

July 27th, 1899. 

Marquis Yamagata Aritomo, 

Minister President. 
Marquis Saigo Yorimlchl, 

Minister for Home Affairs. 
Viscount Aokl Shuzo, 

Minister for Foreign Affairs. 
Kiyoura Kelgo, 

Minister for Justice. 



APPENDIX 573 

IMPERIAL ORDINANCE NO. 352. 

Art. I. Foreigners who either by virtue of Treaty or of cus- 
tom have not freedom may hereafter reside, remove, carry on 
trade and do other acts outside the former Settlements and mixed 
residential districts. Provided that in the case of laborers they 
cannot reside or carry on their business outside the former Set- 
tlements or mixed residential districts unless under the special 
permission of the administrative authorities. 

The classes of such laborers (referred to in the preceding 
clause) and details for the operation of this Ordinance shall be 
determined by the Minister for Home Affairs. 

Art. 2. Persons infringing the proviso of clause i of the fore- 
going article shall be sentenced to a fine not exceeding Y. 100. 

SUPPLEMENTARY RULES. 

Art. 5. This law shall be put into operation on and after Au- 
gust 4th, 1899. 

Art. 4. Imperial Ordinance No. 137, of 1894, shall be re- 
scinded after the date on which this Law comes into force. 

HOME OFFICE NOTIFICATION NO. 42. 

Details relating to the operation of Imperial Ordinance No. 
352, 1899, concerning the residence and occupation of foreigners 
who have no freedom of residence either by virtue of Treaty or 
of custom are decided as follows: — 

July 28th, 1899. 

Marquis Saigo Yorimichi, 
Minister for Home Affairs. 

Art. I. The administrative authorities mentioned in Art. I of 
Imperial Ordinance No. 352, 1899, shall be the head of each 
prefecture and of Hokkaido. 

Art. 2. The laborers mentioned in Art. I of the sarne Law 
shall be men engaged in labor in agricultural, fishing, mining, 
civil engineering work, architectural, manufacturing, transporting, 
carting, stevedoring, and other miscellaneous work. Provided 
that this rule is not applicable to those who are employed in house- 
hold services such as cooking and waiting. 



■^ 



574 APPENDIX ^'it/,'' 

Art. 5. Permission given to laborers (to reside in the interio'^" 
may be cancelled by a local Governor when he deems it necessarj 
to do so for the public welfare. 



APPENDIX M. 

NOTES EXCHANGED BETWEEN THE UNITED 

STATES AND JAPAN, NOVEMBER 30, 1908, 

DECLARING THEIR POLICY IN 

THE FAR EAST. 

imperial japanese embassy, washington. 

November 30, 1908. 
Sir: 

The exchange of views between us, which has taken place at 
the several interviews which I have recently had the honor of 
holding with you, has shown that Japan and the United States 
holding important outlying insular possessions in the region of the 
Pacific Ocean, the Governments of the tw^o countries are animated 
by a common aim, policy, and intention in that region. 

Believing that a frank avowal of that aim, policy, and inten- 
tion would not only tend to strengthen the relations of friendship 
and good neighborhood, which have immemorially existed be- 
tween Japan and the United States, but would materially con- 
tribute to the preservation of the general peace, the Imperial Gov- 
ernment have authorized me to present to you an outline of their 
understanding of that common aim, policy, and intention: 

1. It is the wish of the two Governments to encourage the free 
and peaceful development of their commerce on the Pacific Ocean. 

2. The policy of both Governments, uninfluenced by any ag- 
gressive tendencies, is directed to the maintenance of the existing 
status quo in the region above mentioned and to the defense of 
the principle of equal opportunity for commerce and industry in 
China. 

3. They are accordingly firmly resolved reciprocally to respect 



